On Friday, January 8th, California Governor Gavin Newsom released his 2021, $227 billion state budget. The budget situation has improved considerably relative to the June budget act with a $26 billion windfall for this fiscal year. However, the operating deficit could grow to $17 billion by 2024-25 if spending is not curbed.
Newsom proposes $1.5 billion for the infrastructure and necessary incentives to reach the state’s zero-emission vehicle goals. Funding for electric charging stations would be generated by extending vehicle registration and smog fees that are due to expire in 2024 under the Carl Moyer Program. The fees would be extended through 2045, but most of the money would be spent by 2023, according to a budget change proposal from the California Department of Finance. Extension of the Carl Moyer Program will require supermajority approval.
Newsom is also proposing to replace the flat-fee pesticide mill assessment with a tiered mill assessment. The tiered mill assessment will be based on a product’s “signal word” as determined by the United States Environmental Protection Agency and will be phased in over four years. When the tiered mill is fully implemented, products without any signal word or a “Caution” signal word will be assessed 26 mills; products with a “Warning” signal word will be assessed 40 mills; and products with “Danger” and “Poison/Danger” signal words will be assessed at 45 mills.
On a more positive note, on December 7, 2020, Western Growers was part of a coalition of water agencies and businesses urging the Natural Resources Agency to utilize funding in Proposition 68 as a catalyst for the implementation of Voluntary Agreements. The Agency responded to this request and the governor’s budget proposes to spend $125 million from Proposition 68 for its Protecting California’s Rivers, Streams and Watersheds Program.
Major program changes for agriculture include the following:
- State Water Efficiency and Enhancement Program Grants: $20 million General Fund in 2020-21 and $20 million in 2021-22 for grants that support agricultural water efficiency improvements, with a focus on depleted groundwater basins.
- Cap and Trade Expenditure Plan: Healthy Soils Program: $15 million Greenhouse Gas Reduction Fund in 2020-21 and $15 million in 2021-22 for the Healthy Soils Program.
- Transition to Safer, Sustainable Pest Management: $11.8 million General Fund to support Integrated Pest Management programs and for cooperative agreements to expand University of California and California State University research and extension capacity.
- California Farm to School Incubator Grant Program: $10 million General Fund to continue the farm to school program to enhance the school food system and help support California farmers to expand healthy food access in schools.
- Produce Safety Program Continuation Funding: $8.7 million Federal Trust Fund and 24 permanent positions to develop a more robust inspection program for the enforcement of the Food Safety Modernization Act, Produce Safety Rule in California.