California administration officials and agency leaders on Tuesday described a multi‑year spending plan for Proposition 4 that prioritizes drinking water and wastewater assistance, recycled water, dam safety, groundwater management and flood protection while reserving larger investments in later years for project implementation and staffing.

The administration plan allocates roughly $3.8 billion of the $10 billion bond to the water chapter, with roughly $183 million identified for drinking water and wastewater programs administered by the State Water Resources Control Board in the upcoming year, Joaquin Esquivel, chair of the State Water Resources Control Board, told the Assembly Budget Subcommittee No. 4. "These bond dollars are some of our most flexible" funding, Esquivel said, and can be used without some of the federal restrictions attached to federal aid.

Why it matters: Proposition 4 is intended to finance climate resilience and water investments statewide. Lawmakers and analysts told committee members they want more detail and more public reporting about how the bond will be spent and flagged concerns where the administration proposes shifting existing general‑fund appropriations onto the bond.

Administration overview and LAO review

Andrew Hall of the Department of Finance and Casey Shemke of the Department of Water Resources (DWR) said the administration
pproach is deliberately multi‑year. Shemke said the budget year request for groundwater storage, banking and recharge is limited in the first year but is intended to build on prior investments and to support guideline development for competitive grant programs. "The request looks small in the budget year but it's really building off of a healthy investment," Shemke said, noting prior state investment in SGMA implementation.

Sonia Pedic of the Legislative Analyst's Office told the committee the water chapter is the largest single component of the bond (about $3.8 billion) and covers more than 32 programs administered by nine departments. Pedic said many of the funded programs are established and have existing prioritization mechanisms, such as the Water Board's annual drinking water needs assessment and DWR's Central Valley flood protection planning. The LAO recommended requiring additional reporting in the out years for newer or restart programs whose guidelines are not yet finalized.

Salton Sea, tribal water, recycled water and dam safety

The administration plans to devote $160 million for Salton Sea projects and $10 million to create the Salton Sea Conservancy, implementing legislation passed last year contingent on voter approval of Proposition 4, the LAO and the Water Board said. "The projects have already been identified," Pedic said, and the administration proposed appropriating most of the project funds in 2025–26.

Esquivel said the Water Board will draw down about $183 million this budget year for drinking water and wastewater work, including septic‑to‑sewer conversions, recycled water and tribal water projects, plus a targeted fund for the Tijuana River Valley and other border water quality challenges.

On dam safety, DWR described $480 million in Proposition 4 funding to assist dam owners with repairs and rehabilitation. Assemblymembers asked why the administration proposed shifting $47 million in earlier dam safety appropriations to Proposition 4 as a "backfill"; Megan Larson of the Department of Finance said the move was intended to preserve general fund resiliency amid overall budget pressure and was not a policy decision to reduce dam safety work.

Groundwater and SGMA

DWR officials reiterated that SGMA implementation has received extensive prior funding and that Proposition 4 funding for groundwater will be used where additional needs remain. Shemke said more than $350 million has been spent in the last three years on SGMA implementation and that the bond funding would be targeted through new program guidelines and stakeholder engagement.

Committee concerns: reporting, funding shifts and timelines

Multiple members raised concerns about the administration
pproach to shifting existing general fund allocations onto the bond ("backfilling") rather than delivering new money. Assemblymember comments repeatedly asked for a single public dashboard and regular reporting showing where funds are directed, and the LAO recommended asking the administration for more detailed budget requests in future years for programs without updated guidelines.

The committee also asked the administration to identify programs for which multiyear appropriations are essential (for example, staffing to stand up new grant programs and multi‑year implementation of complex flood or restoration projects).

What remains unresolved

Members asked for additional detail about: whether in‑stream flow programs were being reduced (administration and Water Board officials said they did not expect reductions); how the administration will prioritize a modest tribal water fund of $25 million over the life of the bond (roughly $11 million requested in the budget year for initial work); and how groundwater recharge and multi‑benefit land repurposing programs will be designed.

The LAO and several committee members said they will press the administration for future, project‑level updates and for greater transparency if the legislature is to assess progress and to avoid using bond money as a substitute for recurring general‑fund responsibilities.

Ending

Committee members and agency witnesses agreed to follow up on program guidelines, monitoring reports and possible additional hearings. Several legislators urged the administration to prioritize public dashboards and annual reports so that both the public and the Legislature can track where Proposition 4 dollars go and whether bond funds are additive rather than replacing existing state spending.