California Gov. Gavin Newsom (D) unveiled a $286 billion general fund budget buoyed by a projected surplus of $45.7 billion earlier this month.
The spending plan outlines $10 billion in new spending, fully funds the state’s rainy-day fund and pays down future allocations, while increasing spending on “five of California’s biggest challenges: COVID-19, climate change, homelessness, inequality and keeping our streets safe.”
The budget Newsom detailed would be California’s largest ever and includes several budget items to help farmers and ranchers recover from drought and wildfire and adapt to climate change.
To combat the effects of climate change, the proposed budget adds an additional $1.2 billion on top of last year’s $1.5 billion over two years to continue investments in forest health and fire prevention, including a major new reforestation effort. The budget invests $400 million in firefighting efforts, including toward firefighters.
According to the California Cattlemen’s Association (CCA), Newsom, during the press conference, showed a slide highlighting grazing’s role in forest health and resilience and touched on CCA priorities, such as expanding grazing and utilizing prescribed fire. The proposed budget also earmarks $382 million for strategic wildfire fuel breaks and $44 million for community hardening, among other funding priorities.
The budget builds on an investment of $5.2 billion over three years with a one-time $750 million infusion into the general fund for drought resilience and response. Several items within the infusion would benefit farmers and ranchers, including $40 million to repurpose irrigated agricultural land and rangelands to reduce reliance on groundwater, $20 million for the State Water Efficiency and Enhancement Program to improve on-farm conservation, and $10 million for small farmers and ranchers who experience water cost increases of 50 percent.
The budget also includes a $768 million one-time general fund over two years to help implement the state’s Natural and Working Lands Climate Smart Strategy and Pathways to 30×30 strategy.
Under the heading “Climate Smart Agriculture,” Newsom proposes $1.1 billion over two years, with $417 million in the second year “to provide critical support for farmers and ranchers as they continue to work towards the state’s climate goals.” Among the investments are $150 million for the Funding Agricultural Replacement Measures for Emission Reductions Program, which helps fund the replacement of agricultural equipment to reduce greenhouse gas emissions, $85 million for the Healthy Soils Program and $48 million in livestock methane emission reduction funding.
Additionally, there are some tax credits and other breaks in the budget proposal, including the reinstatement of a “net operating loss” tax deduction for businesses and the recently adopted pass-through entity tax allowing business owners to mitigate the impact of the $10,000 limit on state and local tax deductions.
Jamie Johansson, president of the California Farm Bureau, stated farmers are facing “unprecedented challenges beyond their control,” and “it is critical that we shore up the farm economy” to ensure farmers have a voice in the programs that are supposed to benefit them.
“We need water, inputs and markets to feed people and provide the jobs that are the backbone of the California economy,” Johansson said in a statement. “Gov. Newsom’s budget is a good framework for this year’s budget discussions in that it proposes to fund more water storage and conveyance, an opportunity for California-grown products in schools, funds for both implementation of and research on climate-smart ag practices and begins to relieve the massive burden on employers on costs associated with COVID-19.”
CCA stated they will “continue to press for investments to expand grazing on state-owned lands and improve the state’s resilience to wildfire and drought ahead of the ‘May Revise’ of the state budget,” and they will inform members of budget issues that affect ranchers. The “May Revise” is the process in which the finance department submits actual revenue and expenditures for both the current and budget years, and the governor unveils his updated budget to the Legislature. After wrangling between the state Assembly, Senate and governor, a final budget must be approved by June 15.
In addition to the above provisions, Newsom’s spending plans include billions in additional investments to combat COVID-19, confront homelessness, fund community colleges and state universities, provide affordable housing, reduce crime rates and expand health care. — Charles Wallace, WLJ editor
