On January 10, Governor Gavin Newsom released a $291.5 billion 2024-2025 state budget proposal amid what he says is a $37.86 billion budget deficit. The governor cites the stock market decline in 2022 and tax revenue collection delays in 2023 as the major drivers of the budget shortfall.
Governor Newsom’s budget plan reflects a deficit projection that is much lower than the December 2023 estimate from the nonpartisan Legislative Analyst’s Office (LAO), which projected a $68 billion deficit.  
The governor says he is more optimistic than the LAO about the future and calls his budget a “normalization and correction after a period of distortion.” He is also accounting for differences, such as deferrals of funding to later years, use of Rainy Day state reserve funding, cuts, and fund shifts, among other budget maneuvers.
Regulatory implementation of new laws 
With limited exceptions, the governor’s 2024-2025 budget plan defers all new discretionary spending to implement recently chaptered legislation until the spring when actual revenues become clear. This means funds relating to the regulatory process for new laws are paused for state government departments and agencies. In the meantime, Governor Newsom’s Administration and the Legislature will work to prioritize the budget for recently approved statutes.
Where are the budget cuts, shifts, & delays?
During his presentation, Governor Newsom stated that the “belt tightening” is primarily in the areas of climate, housing, school facilities, and not filling vacant state positions.  
How is agriculture impacted in the budget?
Many of agriculture’s budget priorities are within the climate, energy, and water categories in the state budget. The climate portion of the budget maintains about 89 percent of overall climate funds. However, reductions, shifts and delays are prevalent in the climate category for many agriculture-related programs.  
On a positive note, the governor includes over $22 million in emergency exotic pest response funds to be spent in the existing budget year to respond to the severe fruit fly infestation California faces.  Ag Council supports this funding.
On a budget issue important to Ag Council members, the proposed budget unfortunately reverts $18.8 million in previous funding from the Food Production Investment Program (FPIP) back to the General Fund. However, the governor does maintain $46.2 million for FPIP, and applications will soon open for this funding at the California Energy Commission. Ag Council supports FPIP given the program provides grants to help food processors in California reduce energy use and lower emissions.
Governor Newsom’s proposed 2024-2025 state budget plan will be considered in hearings over the next few months and must be approved by the Legislature by June 15.
Click HERE to continue reading about the budget and how the governor’s funding reductions, shifts or delays impact agriculture.