On January 10, 2020, Governor Newsom released his proposed budget for fiscal year 2020-2021.  If approved, it will be the largest state budget in California history at $222 billion.

Now that it has been introduced, the Legislature will begin holding committee hearings on the items proposed in anticipation of the May budget revision.  The Legislature will then have until June 15 to finalize the budget and send it to the Governor for his signature.

General

The budget includes the highest investment in education in state history including a proposal of roughly $900 million to address the state’s teacher shortage and improve teacher training.  For healthcare, the Governor proposes a revamp of Medi-Cal to increase preventive health services, boost assistance for homeless people and improve mental health care by adding $700 million in additional funds to the program.  The budget will also allow undocumented people over age 65 to enroll in Medi-Cal. To combat homelessness, the Governor is proposing that $750 million from the State’s surplus be distributed to local providers to help pay rent, build housing, and improve shelters.

Newsom is also calling for about $90 million in new spending in Fresno and other inland areas for ongoing and one-time projects related to hospitals and upward social mobility.  This includes $15 million to expand services from the UC San Francisco School of Medicine’s Fresno Branch Campus in partnership with UC Merced.

Labor

The budget dedicates 17.5 million for enforcement of AB 5 (Gonzalez).  The Governor stated he is sure there is more work to be done on the issue, but right now it is the law of the state and it is his job to enforce it.  An Employee Status Portal has been established to answer questions and provide resources to workers and employers.  It can be found here: https://www.labor.ca.gov/employmentstatus/.

Pesticide Alternatives

The budget proposes $350,000 General Fund one-time to fund the work group and accelerate the transition of the California agricultural industry to alternative, less toxic crop protection tools.  This proposal is also aimed at cutting through what CalEPA is calling “the green tape” to get alternative products to the market sooner.

Climate Resiliency Bond

The Governor is proposing a $4.75 billion climate resilience bond for the November 2020 ballot to support investments over the next five years.  The bond is structured based on climate risks, and approximately 80 percent of the funds are allocated to address immediate, near-term risks (floods, drought, and wildfires), while the remaining funds lay the groundwork for addressing long-term climate risk (sea level rise and extreme heat). The bond aligns with the Administration’s draft Water Resilience Portfolio and includes the following allocations:

  • Regional and Inter-regional Water Resilience—$1 billion to support various water management programs and projects with a focus on regional and inter-regional water projects.
  • Sustainable Groundwater Management—$395 million to support local groundwater sustainability agencies implementing projects and programs related to the groundwater sustainability plans for critically overdrafted basins.
  • Safe Drinking Water—$360 million to provide grants and loans to disadvantaged communities to improve access to safe drinking water, including funding capital infrastructure costs for improved water supplies, treatment, and distribution to make vulnerable communities more resilient to the effects of climate change.
  • Environmental Farming Incentive Program—$200 million for grants, incentives, and demonstration projects to enhance agricultural lands for soil health, water quality and efficiency, biodiversity, resiliency, and habitat benefits. Specific projects include healthy soils, water efficiency, nutrient management, and other conservation practices on farms and ranches.
  • Wildfires—$750 million to harden critical public infrastructure in high fire-risk communities and makes additional investments in forest health.

Climate Catalyst Fund

The budget includes a $1 billion General Fund investment ($250 million in 2020-21, with additional funding in later years) for a Climate Catalyst Fund, administered by the state’s Infrastructure Economic Development Bank in consultation with the Strategic Growth Council and the Labor and Workforce Development Agency. This revolving loan fund will provide low-interest loans for climate-related projects, prioritized in areas that help meet the state’s climate and equity goals, and where technologies and infrastructure exist that could be deployed at much greater speed and scale but face barriers in the private market. Eligible projects include dairy digesters, agricultural and off-road engine replacement, and efficient on-farm irrigation.

Cap and Trade Expenditure Plan

The Governor’s Cap and Trade proposal includes $50 million for the FARMER program to upgrade ag diesel engines, $20 million for methane reductions, and $18 million for the Healthy Soils Program.  All funding is one-time, except healthy soils, which will be ongoing for 5 years.

CCM signed on to a joint statement expressing disappointment with the reduced amount for FARMER funding.

Additional CDFA Budget Highlights

Farm to School Baseline Funding:  $10 million in 2020-21, and $1.5 million in 2021-22 and ongoing, to establish six positions to provide baseline and expansion support to the Office of Farm to Fork’s (CDFA-F2F) California Farm to School Network. This request includes $8,496,000 to be made available for grants to qualifying school districts participating in a farm-to-school incubator pilot. This request will allow CDFA-F2F to create a roadmap for transformational change in the school food system that supports California farmers, and expands food access.

Fresno-Merced Innovation Corridor: $33 million in 2020-21 to develop a Fresno-Merced Food Innovation Corridor Grant Program to stimulate research and development, commercialization, and innovation to advance sustainable agricultural production and processing and support high quality jobs in the San Joaquin Valley.

State Water Efficiency and Enhancement Program(SWEEP): $20 million in 2020-21 to award, administer, and monitor SWEEP grants with a focus on depleted groundwater basins.

Cannabis: The budget proposal includes a significant change in the regulatory structure for cannabis. The Administration plans to consolidate the three licensing entities–CDFA, the Department of Public Health and the Bureau of Cannabis Control–into a single Department of Cannabis Control by July 2021. The Administration will submit more details on this proposal in Spring 2020.

Food Waste Recovery: $188,000 for CDFA to help minimize the waste of edible food for humans and animals; aid in meeting the state’s waste reduction goals; research and implement methods for diverting organic waste from landfills; and develop organic waste processing and recycling infrastructure.

Agricultural and Rural Economic Advisor: $199,000 in ongoing funding to support the activities necessary to develop and implement strategies for improving California’s rural, agriculturally based economies. This will enable CDFA to collect data and information that allows informed policy discussions on strategies and or initiatives that will enhance rural economies through innovation, technology, education, and workforce training.

Statement on Reduced Funding for FARMER in 2020-21 Budget Proposal

This past week Governor Gavin Newsom released his proposed 2020-2021 Budget for the State of California. While we are encouraged by the Governor’s proposed investment in rural communities through food and education programs, the Governor’s budget proposal falls woefully short in delivering necessary funds to the San Joaquin Valley for programs to improve air quality.  Specifically, the budget proposal calls for only $50 million in FARMER incentive funding to replace old farm equipment such as tractors and harvesters with new low emission equipment.

The use of the FARMER Program incentives has proven to be hugely successful with the replacement of farm equipment having already achieved significant reductions of NOx emissions in the first three years of implementation.

FARMER received $75 million in 2019-20 and $130 million in 2018-19.  Last month, the California Air Resources Board (CARB) called for a minimum of $193 million per year in FARMER funding as the only way to achieve attainment of the State’s air quality standards.  The proposed $50 million in the 2020 budget is inadequate to reach the State’s emissions reduction goals and assures that the San Joaquin Valley, which faces some of the worst air quality in the Nation, will not achieve the standard.

The FARMER program is an example of industry and government working together to provide solutions for a significant challenge facing our rural communities and is worthy of continued investment.

With rising farm equipment prices, increasing fuel prices, and ever-growing labor costs coupled with stagnant commodity prices, a mandatory farm equipment regulation will be overwhelming to the agricultural industry in the San Joaquin Valley.

For the health of the San Joaquin Valley and all who live and work here, we call on our Central Valley legislators to see that funding for the FARMER program is fully restored and increased to the necessary level.