California climate funding showdown tests Newsom agenda

California Senate Democrats are using the state budget to block Gov. Newsom’s carbon-market overhaul that would award free pollution permits to refineries and big polluters, arguing it undermines last year’s three-way climate deal. They want funds redirected to housing, transit, clean air and water programs and threaten to stall Newsom’s priorities like EV incentives and high‑speed rail unless the deal is funded. The Legislative Analyst’s Office warns the changes could cut climate-revenue from about $4 billion to $2 billion, jeopardizing emissions targets, as negotiations continue with a June 30 deadline and room for summer bargaining.