Governor Newsom Proposes 2020-2021 State Budget
Governor says, “California’s economic growth has fueled the nation’s economy”
Gov. Gavin Newsom presents his proposed 2020-2021 state budget. Photo Credit: Associated Press
Governor Gavin Newsom released his proposed $222 billion budget plan for 2020-2021 earlier in January during a nearly three-hour budget presentation where he fielded questions from the press while streaming the session live on social media.
The budget plan is about 2.3 percent larger than the prior state budget and emphasizes the governor’s priorities in the areas of education, health care, housing, poverty and wildfires. The governor continues to set aside reserve funds, as well.
Governor Newsom said, “As 2020 begins, California’s economy is the strongest in the nation and the fifth largest in the world. We’re eliminating debts, paying down pension liabilities, growing our reserve funds – the largest ever at $21 billion – and one out of every seven new U.S. jobs is in California.”
On the flip side, he said, “Despite the progress we’ve made, there are deep, structural challenges that threaten our state’s future and demand our urgent attention.” He cited housing affordability, homelessness and catastrophic wildfires as critical issues during his budget presentation.
Keep in mind the governor’s budget plan is a proposal that will be analyzed and adjusted by legislators in the Assembly and Senate Budget Committees over the next few months.
Climate Resiliency
Governor Newsom announced a total of $12 billion for the three pillars of his climate resiliency plan: 1) the Cap and Trade Expenditure Plan, 2) a climate bond measure, and 3) a Climate Catalyst Fund.
Cap and Trade Expenditure Plan
The governor announced funding for the 2020-2021 Cap and Trade Expenditure Plan at $965 million – below previous years. Funding for the Expenditure Plan derives from the entities in California required pay into the cap and trade program given they are emitting 25,000 metric tons or more of greenhouse gases annually.
The Expenditure Plan comprises multiple funding categories, such as low carbon transportation, healthy forests, programs to reduce pollution, as well as funding for agriculture to lower emissions.
Ag-related funding in the governor’s 2020-2021 Cap and Trade Expenditure Plan is proposed at the following levels:
- Ag emissions incentives (tractors, harvesters, trucks) – $50 million
- Dairy manure methane reduction projects – $20 million
- Healthy Soils – $18 million
The funding proposal is the beginning of the process with much more work to be done in the coming months as the Assembly and Senate Budget Committees review and place their own stamp on the state budget. During this process, Ag Council is advocating for increases in the funding allocation for ag emissions incentives and the dairy manure methane reduction programs given the health benefits provided in disadvantaged communities, in particular.
Climate bond
Governor proposes $4.75 billion bond for the November 2020 ballot:
- 80% of funds go toward immediate fire, drought & flood risks
- $750 million for wildfires, CALFIRE and emergency services
- $1 billion for regional water projects
- $395 million for Sustainable Groundwater Management Act (SGMA)
- $360 million for Safe and Affordable Drinking Water
- $200 million for Environmental Farming Incentive Program (Healthy Soils, water efficiency, nutrient management)
Legislators have their own climate bond measures pending and plan to develop their bond packages in the coming months while taking the governor’s proposal into consideration before a final climate bond is crafted this year.
Climate Catalyst Fund
Governor Newsom proposes $1 billion over four years for a Climate Catalyst Fund beginning with $250 million in 2020-2021 to support climate goals with low interest loans operated via the Infrastructure and Economic Development Bank. Potential areas of funding include forest management, climate smart agricultural practices, municipal waste and recycling and zero emission vehicles.
This is a newly introduced endeavor by the governor with more details yet to be provided during the budget review process.
School Nutrition
The governor’s budget plan contains a $60 million increase for school nutrition programs and $10 million for food service training for workers to promote healthier meals. The purpose is to improve the quality of meals for school children and promote more participation in nutrition programs.
Ag Council is speaking with Budget Committee members to ensure the increase in funding is utilized to purchase food grown and produced in California and that the funds be available for “all forms” (fresh, canned, dried, frozen, etc.) of healthy food.
In a related effort, the budget further proposes $10 million in funding for the California Department of Food and Agriculture to create a Farm to School Grant program to expand access to healthy food from California farmers.
Water
In addition to the funding elements for water in the climate bond proposal, the following SGMA-related and water efficiency funds are in the governor’s budget plan (this is just a small snapshot of the overall funding):
- $60 million over four years at the Department of Water Resources to support SGMA regulatory oversight and technical assistance relating to Groundwater Sustainability Plans, including $30 million in one-time funding for planning purposes and water trading pilot projects across critically overdrafted basins, as well as water efficiency improvements in depleted groundwater basins.
- $20 million for State Water Efficiency and Enhancement Program (SWEEP) grants for farmers to implement water efficiency improvements. The budget places an emphasis on projects in depleted groundwater basins. This is a popular program in the ag community with a backlog of applications at CDFA, so additional funds are welcomed.
- $35 million for ongoing General Fund dollars to the Department of Fish and Wildlife for SGMA implementation and fish enhancements, among other efforts.
Inland California
Governor Newsom continues his attention and support of Inland California, including the San Joaquin Valley, by allocating $50 million in one-time General Fund dollars to accelerate growth and economic development.
The governor’s budget specifically provides $33 million in one-time funding for the Fresno-Merced Food Innovation Corridor to focus on research and development, commercialization and innovation for sustainable ag production and high-quality jobs through a partnership between academia and the private sector.
Ag Council remains engaged in these and other policy issues and our team invites you to contact our office with comments or questions at ph. (916) 443-4887.