Gov. Newsom Releases Budget Plan
How is agriculture impacted by the proposal?
| Governor Gavin Newsom recently released a $227.2 billion 2021-22 state budget framework emphasizing COVID-19 response funds, including $372 million to distribute and administer vaccines for Californians and $14 million in economic stimulus funds. The governor’s January budget proposal is an initial blueprint, and legislators will spend the ensuing four and a half months developing their own budget package. Overall, investments in agriculture total of $384.6 million in the form of climate smart agriculture programs, water use efficiency grants, regulatory alignment and other funding efforts. A synopsis of some of the funding proposals is below, including a concerning new pesticide fee assessment system. Climate Smart Agriculture The governor is prioritizing funding for climate-focused grant programs to continue the collaboration between the state and California’s farming community to proactively reduce greenhouse gas emissions. We appreciate funding in the governor’s budget proposal for the following programs (not comprehensive of all ag, climate, and water-related funding): FARMER Program $170 million to be allocated over the course of two budget years to replace ag equipment to improve air quality by reducing greenhouse gas emissions. This program is housed at the California Air Resources Board (CARB) and matching grants for farmers are made available through local air districts; Healthy Soils $30 million to the California Department of Food and Ag (CDFA) over two budget years for grants to support on-farm soil management practices that sequester carbon; Water 1) Sustainable Groundwater Management Act (SGMA) grants – $60 million over two budget years at the Department of Water Resources for economic mitigation planning and groundwater projects in critically overdrafted basins and 2) State Water Efficiency & Enhancement Program (SWEEP) at CDFA – $40 million over two budget years for this grant program popular with farmers to incentivize projects that reduce of water use and lower emissions. With regard to dairy, the governor’s budget plan does not contain any funding for existing dairy programs to reduce manure methane emissions. In our view, dairy programs should continue to receive some funding given the dairy community continues to participate in voluntary compliance measures to reduce methane. In another climate related budget item, $50 million is allocated to the Climate Catalyst Fund, which is a revolving loan fund created as a financing tool for climate smart ag loans intended to advance various energy, methane reduction and water-focused projects. Pest Management Ag Council is concerned about a new pesticide mill assessment structure proposed in the governor’s budget at the Department of Pesticide Regulation (DPR). The plan would replace the current flat-fee assessment with a risk based tiered mill assessment based upon toxicity and would be phased in over four years. The stated goal is to further shift to more integrated pest management (IPM) and biological pest management. Once fully implemented in four years, the tiered mill assessment proposal will lead to approximately $45 million in increased revenue to the state to be spent on various DPR and CDFA programs, research to transition to alternative pest management, enforcement by county ag commissioners and air quality monitoring. Given the impact of this proposal on the agriculture community, Ag Council is part of a coalition working to coordinate a response to the tiered assessment proposal. In related funding, the 2021-22 budget plan contains $3.75 million for IPM strategies and a Biologically Integrated Farming Systems grant at CDFA. Research funds for IPM through cooperative extension at CSU and UC academic institutions are proposed at $8 million in the upcoming budget year, and we want to ensure those dollars reach farmers for on-farm projects and efforts at the ground level. The governor’s budget also designates $16.5 million for enforcement of pesticide use laws at the ag commissioner level and air monitoring at the local level. Regulatory Alignment for Agriculture The governor’s budget proposal recognizes that agriculture is subject to regulatory compliance and reporting requirements across various agencies, and the plan includes $6 million for regulatory alignment and efficiency efforts. In his budget press conference, the governor said the purpose of the alignment plan is to “reduce unnecessary burdens to farmers and ranchers in their efforts to meet regulatory compliance.” The budget plan allocates a portion of the funds to explore the creation of a unified licensing portal at CDFA. The governor said the purpose is “to streamline regulations and reporting across the spectrum for agriculture – that’s long overdue.” Ag Council is reviewing how this endeavor could be structured to be most helpful to food and agriculture. Food Insecurity Food banks and emergency food assistance providers receive a $30 million increase in the budget to help feed hungry families who are facing huge challenges in the midst of the pandemic and job losses. Ten million dollars is designated in the budget for grants to schools to procure California Grown food for students, as well funding school gardens and on-farm learning opportunities. The funds go to the Farm to School Program within the Office of Farm to Fork at CDFA. Next Steps The respective Assembly and Senate Budget Committees are holding hearings to review the governor’s budget plan before legislators develop their budget proposal in the coming months, and Ag Council continues to advocate for our members’ priorities during this process. |