Tucked into a sprawling budget plan the California Legislature approved Wednesday night was a last-minute exemption from the state’s landmark environmental law that lawmakers granted to themselves.
In what they said was a cost-saving measure, Democrats rushed a bill to exempt a $1.1-billion renovation of the state Capitol from the California Environmental Quality Act — a move they hope will expedite the project, which has been tied up in litigation amid concerns from environmentalists and preservationists.
At issue is CEQA, a law passed more than 50 years ago that was designed to preserve the state’s natural beauty and mitigate environmental harm. But it has long been lambasted as a tool that can too easily be abused to block construction, and criticism of it has only swelled as the state faces a housing crisis.
Now lawmakers seeking to renovate the wing of the Capitol that contains their offices are running into the same frustrations many developers have had before them — except they have the power to quickly craft a work-around.
Assemblymember James Gallagher (R-Yuba City) called it “problematic” and “hypocritical” for lawmakers to exempt themselves from an environmental law that often prevents developers from building housing that their constituents need in their own districts.
“I think we have a duty to act better when we’re talking about these things,” Gallagher said during a debate about the bill on the Assembly floor. “Or look, let’s do CEQA exemptions across the board instead of just one-offs for state office buildings for ourselves. It’s not the right look.”
As part of a $297.7-billion spending plan the Legislature sent Gov. Gavin Newsom on Wednesday, a bill created just days earlier allocates $700 million to the Capitol renovation and exempts the project from the environmental law. Lawmakers passed the budget as Newsom arrived in Atlanta to attend the presidential debate as a surrogate for the Biden campaign. He’s expected to return to Sacramento on Friday and must sign the budget before it takes effect on Monday.
The project involves tearing down the 70-year-old portion of the building known as the “annex” — which contained the governor’s office suite, committee hearing rooms and offices for dozens of lawmakers — and replacing it with a larger, more accessible structure. The main part of the Capitol, which was originally built in the 1800s and includes the rotunda as well as the Assembly and Senate chambers, was restored in the 1980s and remains open to the public while the office wing is under construction.
Then-Gov. Jerry Brown approved the project in 2018; although demolition has already taken place, construction has been delayed by lawsuits over the preservation of the Capitol park’s impressive array of trees, historic architecture and access to the west lawn, the site of many protests and news conferences.
Democrats seeking the CEQA exemption say it’s necessary to save taxpayers money and avoid being stuck in perpetual litigation that could further prolong construction and rack up costs. But critics of the project, including Dick Cowan, former chair of the Historic State Capitol Commission, said the maneuver is “sneaky.”
“It’s absolutely terrible. We’ve spent years trying to make this project better,” Cowan said. “It’s not good democracy. It’s not good government. It shows that someone knows how to play a trick card at the last minute.”
State officials backing the project say renovation is needed to keep up with safety standards, citing concerns about asbestos and accessibility.
In a lawsuit, a group named Save the Capitol, Save the Trees alleged the project did not comply with CEQA requirements. A Sacramento appellate court ruled in 2022 that the project violated the law and was not transparent enough with the public.
In a letter sent to legislative budget committee leaders on Saturday, Assemblymember Blanca Pacheco (D-Downey) and Sen. John Laird (D-Santa Cruz) said that the state has already conducted two environmental impact reports regarding the project, downsized a parking garage and backed off plans for a visitor center in response to CEQA concerns.
Despite years of acquiescing to opponents, “meeting their key demands has not settled the matter,” lawmakers wrote. Ongoing litigation could add as much as $5 million a month in costs to an already expensive plan if workers are forced to halt construction, according to the letter.
“We have worked to meet the significant concerns about the project, and this now becomes the best option to protect California taxpayers,” Laird and Pacheco said on behalf of the rules committees they oversee.
During a Senate budget committee hearing on Wednesday, Sen. Scott Wiener (D-San Francisco) rejected “a narrative” that paints lawmakers as self-serving and said the situation shows how CEQA is misused by special interests.
“The situation here is actually one of the things that frustrates all of us about CEQA — that CEQA is being used for reasons that have literally nothing to do with the environment to stop a project and to escalate costs for taxpayers,” he said.
Assembly Budget Chair Jesse Gabriel (D-Encino) offered a similar defense.
“I think it’s important that people understand the millions of dollars that are going to be saved by this bill are millions of dollars of taxpayer money,” Gabriel said before the Assembly passed the legislation Wednesday evening.
Though many business interests and housing advocates have long called for comprehensive reform of the environmental law, broad changes have never been embraced at the Capitol. Instead, lawmakers have allowed exemptions in specific cases, including for new sports arenas and student housing. Newsom last year approved some changes to CEQA to speed up certain infrastructure projects.
“This is another example of what I call Swiss cheese CEQA,” said Bill Fulton, director of the Kinder Institute for Urban Research at Rice University and a leading expert on California land use. “The Legislature doesn’t try to take a logical approach. Whenever they get upset about it, they punch a hole in it.”
