The move would mark a significant boost to a massive effort to test and clean homes, schools, day-care centers and parks around the Exide Technologies facility that is expected to cost hundreds of millions of dollars. Residents in the working-class Latino communities around the plant have complained for years about the pollution and criticized government agencies as slow to deal with the problem.
The funds, which the state would seek to recover from Exide, would be paid over the next year to test 10,000 homes within 1.7 miles of the closed plant and to remove lead from about 2,500 homes where levels pose the greatest risk of poisoning, said Barbara Lee, director of the Department of Toxic Substances Control.
The testing would be done in Boyle Heights, East Los Angeles, Commerce, Bell, Huntington Park and Maywood.
"This is clearly the largest cleanup the department has ever undertaken," said Lee.
The $176-million amount, which would require approval from the Legislature, was based on the department's estimate that 20% to 25% of homes in the area may have lead levels high enough to be given highest priority for cleanup.
Exide agreed to shut the plant last March under a deal with federal prosecutors. To avoid criminal charges, the company agreed to be responsible for the full cost of cleaning the lead contamination. But the cleanup has not proceeded quickly or smoothly.
Since detecting lead contamination in the soil of homes around Exide two years ago, the state Department of Toxic Substances Control has tested about 500 homes and cleaned up about 195.
The department pledged $7 million for cleanup and testing last year, and Brown later proposed adding $8.5 million. But lawmakers and community groups said that commitment was woefully short of the amount needed to deal with a serious health risk.
"With this funding plan, we're opening a new chapter that will help protect the community and hold Exide responsible," Brown said in a statement Wednesday.
An Exide spokeswoman did not immediately comment on Brown's proposal.
The Exide plant melted down and recycled used car batteries, releasing lead, arsenic and other harmful pollutants into the air while the state allowed the plant to operate for decades without a full permit.
Years of air pollution from the facility left behind lead dust, a toxic metal that can cause learning disabilities, lower IQs and other developmental problems — even at low levels — with children and pregnant women at greatest risk.
Brown's proposal was praised by local officials, state lawmakers and community groups, all of which had intensified criticism of the state's commitment to help Southeast L.A. County communities at a time when it was responding vigorously to address health effects of the gas leak near the wealthy neighborhood of Porter Ranch.
"Gov. Brown has sent a message that environmental fairness and equity is a fundamental value no matter where you live or how much you make," Assemblyman Jimmy Gomez (D-Echo Park) said.
Assembly Speaker-elect Anthony Rendon (D-Paramount) called the boost in funding a victory that resulted from lawmakers and community members raising "the fierce urgency of this issue to the governor."
Los Angeles City Councilman Jose Huizar, who represents the Boyle Heights area, thanked the governor for taking steps to address "the emotional and physical wounds that the people of these communities have suffered for a long time."
Huizar called the money a down payment on the total amount needed to remove the lead. Each contaminated home costs about $40,000 to clean, according to the toxic substances department.
The funds would be a supplement to this year's budget and would be lent to the toxic substances department from the state's general fund. "However, cleanup costs initially incurred by the state will ultimately be sought from the parties responsible for the lead contamination," according to a letter Wednesday from the state Department of Finance to lawmakers.
The cost recovery would be based on tests the state would conduct to "conclusively identify the source of the contamination and hold Exide — and any other responsible parties — accountable," the letter said.
Senate President Pro Tem Kevin de León (D-Los Angeles) told reporters during a conference call that he would introduce legislation to expedite delivery of the money.
De León blamed the cleanup delays partly on incompetence at the toxic substances department. And like other state officials, he addressed questions about why the state and taxpayers should carry the immediate costs rather than Exide.
De León described the funds as "a loan to ultimately be paid back by the polluter." He said the contaminated communities "can't wait any longer because we have had a community that has suffered greatly for many years."
He said the state will work with federal prosecutors "so they can keep Exide honest."
L.A. County Supervisor Hilda Solis, who represents the communities around the Exide plant, was pleased that the governor's proposal went above even the $70 million she and other elected officials had been requesting for the cleanup, calling it "a good start" that "restores our sense of social justice."
"We still have to do more," she added, noting that the full cleanup could cost in excess of $400 million.
Mark Lopez, who directs the group East Yard Communities for Environmental Justice, said Brown's action sends "a clear message that despite the state's failure to ensure our communities were protected from Exide, the cleanup will be a priority for the state, and Exide will be held liable."
Times staff writers Patrick McGreevy, Melanie Mason and Emily Alpert Reyes contributed to this report.