Prop 45 Is a Taxpayer Trap. Every Public Official Needs to Understand Why.

The California Chamber of Commerce wants voters to believe its ballot initiative is a commonsense fix to an outdated law. It is not. The initiative is a sweeping rewrite of the California Environmental Quality Act (CEQA), the state’s most important environmental law, that would shift enormous costs and legal risk onto cities, counties, and other public agencies across California. The growing coalition of good government, public health, labor, environmental and environmental justice groups opposing this measure aren’t alarmists. They’re reading the fine print. Public officials should too. 

It Removes Discretion and Control from Public Agencies Reviewing Projects.

Under Prop 45, developers — not public agencies — will control the key decisions that determine how environmental protections will be applied to new projects. It dramatically shifts the balance of power away from cities and communities to project developers. 

For example, the measure empowers developers to choose the standards, or “thresholds of significance,” that determine when a project’s impacts will be considered significant and therefore require mitigation. Specifically, project applicants would have the right to “vest into” an agency’s previously published or routinely used thresholds, those that exist at the time the application is filed. This provision is a radical departure from current law, where the lead agency (city, county, or other public district or agency), rather than the developer, selects the thresholds used to evaluate whether a project has significant impacts. The initiative thus shifts key decision-making power from the agency to the developer. 

In addition, because the applicant would be able to lock in standards existing when it filed its application, the agency would have no ability to apply updated standards, even those reflecting new scientific information that could enable the agency to reduce the project’s impacts. Indeed, the initiative does not even require that the applicant’s chosen thresholds actually be designed to disclose significant harm to communities or the environment, the core purpose of CEQA. A prominent legal scholar suggests that this change could incentivize a developer to file its application and “lock in” standards long before initiating the environmental review process, further curtailing agencies’ authority over development.

Prop 45 also dismantles the alternatives requirement that is central to how CEQA actually improves projects. Under current law, an environmental impact report must analyze a reasonable range of project alternatives (typically three to five) designed to reduce harm to communities and the environment. Under the initiative, a developer can require analysis of only a single alternative, which they are allowed to choose. Agencies are explicitly prohibited from considering any other alternatives. Developers are also allowed to avoid the current requirement to analyze potential project impacts on alternative locations where necessary to avoid significant impacts. This is not a minor procedural change, but rather the elimination of one of the most effective tools available to minimize project impacts.

It Establishes Unworkable Deadlines for Many Public Agencies.

Prop 45 imposes a number of new deadlines for the processing of projects that could prove unworkable for many public agencies, especially small cities.

First, the measure extends the Permit Streamlining Act’s short application review deadline (30 days) to all projects covered by the initiative. This is a major change in the law. Currently, the Permit Streamlining Act does not apply to projects that require city councils or boards of supervisors to amend existing land use documents, yet many of the covered projects would likely require a zone change or a general plan amendment to proceed in proposed locations. Suddenly, local agencies would be forced to evaluate large, complicated projects, like the siting of a desalination plant in the coastal zone, under very expedited application review timelines.

Second, the measure requires that responsible agencies approve or deny any permits under their jurisdiction within one day of the lead agency’s approval of the project. For a public agency governed by the Brown Act, which requires 72 hours’ notice for a regular meeting and 24 hours for a special meeting, one day could prove an impossible deadline. 

Finally, Prop 45 imposes strict new deadlines for the submission of public comments on environmental impact reports and other environmental review documents. Under the measure, even for large, complex projects, these deadlines cannot be extended except by court order. 

It Gives Developers a New Right to Sue Local Governments.

Under current law, developers generally cannot sue a public agency under CEQA for denying their project. Prop 45 changes that. It creates a new private right of action allowing applicants to file a CEQA suit against any city or county that rejects a covered project or imposes conditions of approval. 

Consider what this looks like in a hypothetical example. A city council might review a proposed industrial facility near a residential neighborhood and, based on legitimate public health concerns, consider imposing conditions around operating hours or air quality filtration. Under the initiative, the developer could threaten to sue the city for imposing these conditions. The city would then have to choose between absorbing the cost of defending a lawsuit, which diverts resources from essential services, or allowing the project to move forward without mitigation necessary to protect the community. 

It Will Cost Local Governments Dollars They Don’t Have.

The Legislative Analyst’s Office has already estimated that this measure could cost more than $100 million dollars annually in new administrative and litigation costs in the first years of implementation. That’s before accounting for the downstream costs that Prop 45 would generate by weakening environmental protections required as part of the project approval process, and thus limiting agencies’ ability to prevent costly pollution impacts.

CEQA is often how cities and counties require developers to reduce or pay for a project’s impacts on shared resources like clean water, clean air, public open space, and roads. Under the initiative’s weakened review standards, agencies would lose much of their ability to obtain this key mitigation. Notably, when a new development subject to these weakened requirements strains a water system, overwhelms a fire department, or triggers an environmental accident, the cost may not fall on the developer. Local governments and taxpayers will be left to foot the bill.

The consequences of Prop 45 on public health could be especially dire. As air quality worsens near industrial facilities that escape meaningful environmental review, asthma rates may rise, emergency room visits may increase, and Medi-Cal costs could climb. In short, while developers escape the obligation to reduce pollution emitted by their projects, the resulting costs fall on public health systems and the taxpayers who fund them.

It Cannot Be Fixed by the Legislature.

If Prop 45 passes, the Legislature can only amend it with a two-thirds vote, and only if the amendment “furthers the purposes” of the measure. The initiative has no expiration date. Whatever unintended consequences emerge, the Legislature will be essentially powerless to respond.

Prop 45, moreover, undermines the state Legislature’s ongoing efforts to improve and update CEQA. In recent years, it has passed 36 laws just to streamline housing approvals, and last year enacted AB 130 (2025), exempting nearly all urban infill housing from CEQA altogether. Many clean energy projects also already enjoy expedited timelines under AB 205 (2022). There is no need to impose the initiative’s rigid structure on this ongoing process by our elected officials.