How Does it Affect Agriculture?
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Governor Gavin Newsom released his 2026-2027 proposed budget in early January. The nearly $349 billion California budget proposal kicks off the governor’s final year in office given his term concludes in January 2027.
During his recent State of the State address, the governor did not mention a deficit. However, Governor Newsom’s Department of Finance projects a $2.9 billion deficit for the 2026-2027 budget.
This contrasts with the $18 billion deficit projected by the Legislative Analyst’s Office, which incorporates an economic downturn into its budget estimate while the governor did not. In addition to the deficit, federal efforts to withhold funding from California pose budget impediments in multiple areas for the state, such as highway safety and social services.
In the meantime, the state has $23 billion in total budget reserves to address current and future deficits.
Among the items in the budget, the governor’s plan contains Prop 4 climate bond funding for programs such as Healthy Soils, as well as groundwater banking and recharge projects. It includes new funding for an enteric methane reduction program for livestock and ongoing funding for the Farm to School Program.
Ag Council and other organizations are actively meeting with legislators to advocate for the inclusion of the following programs in the budget, which are in need of funding to continue: the Food Production Investment Program (grants to lower emissions at food processing facilities), FARMER (on-farm ag equipment upgrades), livestock methane reduction programs and sustainable ag waste management (alternatives to ag burning). When funded, these programs substantially lower emissions and lead to improved air quality for communities throughout California.
For a detailed overview of specific food and ag-related items in the budget, as well as Ag Council’s efforts click HERE.