Legislature Passes Early Action Budget to Address Shortfall
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Legislators moved to cut $17.3 billion from the state budget this week as part of an early action agreement between legislators and Governor Newsom. This is just an initial step to begin to address the state budget deficit.
As a reminder, the governor’s budget plan predicts a $38 billion deficit while the Legislative Analyst’s Office projects a $73 billion budget deficit, primarily due to personal income tax revenues arriving below expectations.
The action taken this week, dubbed “Shrink the Shortfall,” comprises the following overall budget solutions:
Reductions – $3.6 billion
Revenue/Borrowing – $5.2 billion
Delays – $3.1 billion
Fund Shifts – $3.4 billion
Deferrals – $2.1 billion
Total $17.3 billion
As anticipated, the Food Production Investment Program (FPIP) was reduced by $18.8 million, which was included among the cuts in Governor Newsom’s January budget proposal. However, $46 million is maintained at the California Energy Commission for FPIP, and we are working to seek out alternative funding, if possible.
Also, $22 million in early action funding is provided in the budget to address the exotic fruit fly infestations in California. In addition, $22.7 million is appropriated to the Department of Food and Agriculture for flood damage repairs to the Animal Health and Food Safety South Valley Laboratory in Tulare.
With the May budget revision set to be released in about one month, more fiscal decisions will be made in the coming weeks, and Ag Council will continue to keep members apprised.