Governor Newsom has proposed a $297B budget. This budget anticipates General Fund revenues to be $29.5 billion lower than projections from the 2022 Budget Act and includes an estimated budget gap of $22.5 billion in the 2023-24 fiscal year. While the budget refrains from drawing from state budget reserves, it instead proposes trigger cuts that would restore proposed reductions for certain commitments if there are sufficient General Funds available by January 2024. Proposed to be cut are items such as climate and transportation ($3.1B), housing ($600M), parks ($106M) and workforce training ($55M). Fortunately, for the Citrus Pest and Disease Committee through California Department of Food & Agriculture’s (CDFA) portion of the budget, no budget adjustments have been made. Below are some of the most important proposed adjustments for agriculture.
Climate Smart Agriculture
This budget maintains $1 billion (89 percent) of sustainable agriculture investments. The Budget includes $128 million in General Fund reductions across various programs. If there is sufficient General Fund in January 2024, reductions will be restored. Below are the budgeted cuts:
- Healthy, Resilient, and Equitable Food Systems Investment — A reduction of $20.6 million General Fund in 2021-22 and $8.9 million in 2022-23 across the Urban Agriculture Program, Healthy Refrigeration Grant Program, and Farm to Community Food Hubs Program. This maintains approximately $98 million (77 percent) for healthy, resilient, and equitable food system programs.
- Climate Smart Agriculture Programs — A reduction of $8.5 million General Fund in 2021-22 and $85.7 million in 2022-23 across various programs including Healthy Soils Program, Sustainable Cannabis Pilot Program, Pollinator Habitat Program, Conservation Agriculture Planning Grant Program, greenhouse gas reduction research, Invasive Species Council, and Climate Catalyst Fund. This maintains approximately $867 million (90 percent) for climate smart agriculture programs.
- Economic Recovery and High-Road Job Growth — A reduction of $4.7 million General Fund in 2022-23 for the New and Beginning Farmer Training and Farm Manager Apprenticeships Program. This maintains approximately $5 million (50 percent) for this program.
Drought & Water Resiliency
This budget maintains $8.6B in drought response and water resiliency funds, which is only a 2% shortage from last year’s $8.7B. Below are the new investment proposals likely due to the increase of stormwater received from the previous and ongoing winter storms. Last year, Governor Newsom announced an emergency four-pointed plan (called California’s Water Supply Strategy) that addresses the intensifying drought by creating additional water supplies. Much of those components have been introduced as new investments in this proposal. Below are the new investments:
- Urban Flood Risk Reduction — $135.5 million General Fund over two years to support local agencies working to reduce urban flood risk.
- Delta Levees — $40.6 million General Fund for ongoing Delta projects that reduce risk of levee failure and flooding, provide habitat benefits, and reduce the risk of saltwater intrusion contaminating water supplies.
- Central Valley Flood Protection — $25 million General Fund to support projects that will reduce the risk of flooding for Central Valley communities while contributing to ecosystem restoration and agricultural sustainability.
- 2023 Drought Contingency — $125 million General Fund one-time as a drought contingency set-aside to be allocated as part of the spring budget process, when additional water data will be available to inform future drought needs.
- Planning and Permitting for New Water Supplies — $4.7 million Waste Discharge Permit Fund in 2023-24, and $5.7 million Waste Discharge Permit Fund and $408,000 Safe Drinking Water Account ongoing to support planning and permitting for projects that produce new water supplies.
- Modernizing Water Rights—$31.5 million General Fund one-time in 2023-24 to continue development of the Updating Water Rights Data for California Project to enhance California’s water management capabilities.
- Urban Water Use Objectives — $7 million General Fund over four years to implement Chapter 679, Statutes of 2022, (SB 1157), which established a new foundation for long-term improvements in water conservation and drought planning to adapt to climate change and the resulting longer and more intense droughts. This approach is based on water use efficiency standards for certain categories of water use, including indoor residential water use.
- San Joaquin River Basin Groundwater Recharge: Water Availability Analysis and Technical Assistance — $4.9 million General Fund over five years to continue to provide local water districts methodologies and tools to conduct water availability analyses, which will help facilitate groundwater recharge, one of the core pillars of the Water Supply Strategy.
- Stream Gages—$4.7 million General Fund over two years to begin reactivation of historical stream gages, consistent with the SB 19 Stream Gaging Prioritization Plan and as called for in the Water Supply Strategy.
Below are the budgeted cuts:
- Watershed Resilience Programs—A reduction of $24 million General Fund in 2023-24 and a delay of an additional $270 million General Fund to 2024-25. This maintains approximately $470 million (95 percent) across various watershed resilience programs.
- Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS) Cleanup—A reduction of $70 million General Fund in 2023-24 and a delay of an additional $30 million General Fund to 2024-25. This maintains approximately $130 million (65 percent) of PFAS cleanup resources.
- Water Recycling—A reduction of $40 million General Fund in 2023-24. This maintains approximately $760 million (95 percent) to support water recycling and groundwater clean-up.
- State Water Efficiency and Enhancement Program—A reduction of $40 million General Fund in 2022-23. This maintains approximately $120 million (75 percent) to support farm water use efficiency projects.
- Aqueduct Solar Panels—A reduction of $15 million General Fund in 2021-22. This maintains approximately $20 million (57 percent) to support aqueduct solar panel pilot studies.
- Water Refiling Stations at Schools—A reduction of $5 million General Fund in 2022-23, which eliminates funding for this purpose.
Keep in mind that this budget is highly likely to be amended in May and will be subject to the Legislature’s oversight. Please expect an update from CCM on the future status of the budget. For questions regarding the status of the State Budget, please contact Jacob Villagomez at Jacob@cacitrusmutual.com.
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