In previous posts, I have written about SB 253 and SB 261. The former requires "reporting entities" (as defined) to disclose Scope 1, 2 & 3 greenhouse gas emissions. The latter imposes climate-related financial risk reporting. Both are likely to impose substantial costs on private businesses. Both will also impose costs on the State of California.

One significant problem is that the State of California is broke. Earlier this month, Governor Newsom introduced his 2024-25 state budget proposal. In announcing his budget proposal, he cites a nearly 38 billion dollar "shortfall". The nonpartisan Legislative Analyst estimated the shortfall to be $20 billion higher, or a total of $58 billion.

The Governor is proposing to address the shortfall in part by deferring the consideration of resource requests associated with recently chaptered legislation to the "May Revision". The "May Revision" is an annual update of the Governor's budget presented by the Department of Finance to the legislature that is due by May 14.

The Governor's proposed deferral of funding ignited a quick response from the authors of SB 253 and SB 261, Senators Scott Wiener and Henry Stern, respectively. In a press release, they urged the state to borrow money to implement "These groundbreaking bills include language to advance start-up expenses with the option for a loan from sources like the Greenhouse Gas Reduction Fund." If the state cannot afford to implement these law, one wonders whether the businesses affected by them, large and small, can afford it.