‘There’s less transparency’: Gavin Newsom just gutted California’s landmark environmental law in a stunning $320 billion budget power play

California Governor Gavin Newsom and Democratic state lawmakers have agreed to limit California’s important environmental rules through a last-minute budget deal. The decision came on Monday when lawmakers passed a new bill that will change how environmental reviews are done for many building projects.

According to Politico, the new bill, known as AB 131, will remove many projects from needing to follow the California Environmental Quality Act (CEQA). These projects include wildfire prevention work, water system improvements, parts of the high-speed rail project, and factories that make semiconductors and electric vehicles.

“There’s less transparency and more at stake every year,” said Jennifer Fearing, who has long worked as an environmental lobbyist. She mentioned that she hasn’t had time to understand how this change might affect other environmental goals, like controlling greenhouse gas emissions and transportation costs.

Environmental groups and labor unions fight back against the changes

Environmental groups and workers’ unions tried hard to stop the bill over the weekend, continuing their fierce opposition to Newsom’s housing development agenda that has divided California Democrats. The Teamsters, United Auto Workers, and United Steelworkers warned that the change would let companies like Tesla grow their operations without checking how they affect the environment.

However, these groups didn’t have much power to stop the bill. Newsom made it clear that he would only sign the state’s $320 billion budget if this bill passed, employing the same controversial budget-hostage strategy that has already sparked fierce Democratic opposition to his housing agenda. The Senate approved it with a vote of 33-1, and the Assembly passed it 53-3, with support from both Democrats and Republicans.

This move by Newsom shows even more power than his previous effort to change CEQA in 2023, when he got lawmakers to reduce the time allowed for environmental lawsuits against major building projects.

Some lawmakers defended the changes. Senator Scott Wiener said the bill was a compromise, explaining that he removed some bigger changes he wanted because environmental groups didn’t agree with them. Business groups, like the California Chamber of Commerce and California YIMBY, are happy with the decision, calling it the biggest housing law change in many years.

Environmental and labor groups are now hoping they can make some changes later in the year. They’re especially worried about factories that make semiconductors and electric vehicles, which they say could release harmful waste into nearby neighborhoods. Senator Wiener has said the Senate will work on new rules about factory building, protecting endangered species, and talking with tribal groups in future laws.