Budget Outlook: With Worsening State Deficit, Newsom Continues Funding Cuts for Popular Climate Smart Agriculture Programs While Backing Climate Resilience Bond

Posted on Wednesday, May 17th, 2023 by Sandra Nakagawa
Photo Credit: Office of the Governor

Last Friday Governor Newsom’s office released the May Revise, a part of the annual state budget process which updates the governor’s economic and revenue outlook. With the state facing significant economic uncertainty and a worsening deficit now projected at $31.5 billion, the May Revise maintains over $100 million in proposed reductions to climate smart agriculture programs while proposing a climate resilience bond. 

May Revise Overview:

Climate Smart Agriculture Program Cuts

Major proposed program cuts include three popular Climate Smart Agriculture programs.These cuts were originally proposed in the administration’s January budget and remain in his May Revise.

Healthy Soils Program (HSP): Provides grants to farmers & ranchers to implement practices that decrease GHG emissions and/or increase carbon stored in soil and woody plants.

  • FY 2022-23: $70 million ($15 million reduction (18%) from the original $85 million allocated)
  • FY 2023-24: $10 million allocated

State Water Efficiency and Enhancement Program (SWEEP): Funds on-farm water efficiency improvements such as electric and solar pumps, improved irrigation equipment and soil moisture monitoring.

  • FY 2022-23: $70 million ($40 million reduction (36%) from the from the original $110 million allocated)
  • FY 2023-24: $0 allocated

Alternative Manure Management Program (AMMP): Funds livestock operations to transition from manure lagoons to dry handling and storage, manure composting, and increased time on pastures to reduce potent methane emissions. 

  • FY 2022-23: $48 million (No reduction from original allocation)
  • FY 2023-24: $0 in proposed General Fund support 
Photo Credit: Office of the Governor

Proposed Climate Bond and AB 408

In recognition of the state’s uncertain fiscal outlook, Governor Newsom expressed support for continuing to work with the Legislature to put a climate resilience bond on the 2024 ballot. He proposed at least $1.1 billion in proposed cuts that could be shifted to a potential climate resilience bond, including $60 million for Sustainable Groundwater Management Act (SGMA) implementation, $20 million for the Multi-Benefit Land Repurposing program at the Department of Conservation, and $160 million for Community Resilience Centers.

The May Revise notes, “Given the ambition and urgency of California’s climate agenda, the Administration remains committed to supporting additional resources to continue to advance the climate and opportunity agenda. As indicated at Governor’s Budget, the Administration is committed to engaging the Legislature in pursuing a climate bond over the coming months.”

There are several bills that propose climate, water, and natural resource bond measures already in the Legislature at this time, including one co-sponsored by CalCAN.  Along with 17 additional organizations, CalCAN is co-sponsoring AB 408 which was introduced by Assemblymember Lori Wilson (D-Suisin City). AB 408 proposes a $3.4 billion food and farm climate resilience bond that would fund critical infrastructure on farms and in the food system. If approved by the voters, bond funds can serve as a much-needed supplement to the state’s efforts to invest in climate mitigation and adaptation. 

Flood Relief Funding

Despite the continued economic challenges in the state, the May Revise offers some much-needed relief for agricultural communities impacted by the recent flooding. Specifically, the Governor proposed an additional $290 million in flood protection spending, including $25 million in new relief funding for small agricultural operations.

Photo Credit: Office of the Governor

Assembly and Senate Proposed Plans

While the Assembly has not yet released its own budget plan, the Senate has proposed a spending plan that would restore funding to sustainable agriculture funding slashed in the Governor’s proposed January budget. The Senate plan also proposes $35 million in Greenhouse Gas Reduction Fund (GGRF) monies to support methane reduction efforts, including through the Alternative Manure Management Program (AMMP). 

Next Steps

Leadership from the Assembly, the Senate, and the Newsom administration will continue to negotiate details of the budget until the June 15th constitutional deadline to pass a budget. However, as in past years, it is likely that some additional follow up measures to the main budget act are likely to continue as the legislative session progresses. 

As budget negotiations continue, CalCAN will continue to advocate for robust funding for climate smart agricultural and related programs that are needed to both meet the state’s climate goals and foster climate resilience in the agricultural sector. 

We urge you to join us in advocating for funding for these critical programs. Follow us on social media and sign-up for our newsletter to stay up-to-date on these developments and opportunities to advocate. 

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