Governor Newsom Releases “May Revise” of FY 2021-22 State Budget
On Friday, Governor Gavin Newsom released his “May Revise” of his Fiscal Year 2021-22 Proposed Budget. In the leadup to the Friday announcement, Newsom spent the week previewing elements of the proposed budget, which he has dubbed the “California Comeback Plan.” With a massive $75.7 billion budget surplus and $27 billion in incoming federal aid to the state, Newsom’s budget is an ambitious $100 billion plan. Below are details of those budget proposals of greatest interest to California cattlemen.
Newsom Proposes $5.1 Billion for Water Infrastructure and Drought Resilience
As he rolled out his $100 billion “California Comeback Plan” last week, Governor Newsom on Monday proposed to spend $5.1 billion over the next four years on water infrastructure and drought resilience.
According to a press release from the Governor’s office, the proposal aligns with the Governor’s July 2020 Water Resilience Portfolio, and “is shaped by lessons learned during the 2012-16 drought.”
The largest chunk of the proposed expenditure – $1.3 billion – would be directed at drinking water and wastewater infrastructure, particularly in small and disadvantaged communities. Other elements of the proposal of particular interest to California ranchers include:
- $300 million for Sustainable Groundwater Management Act implementation;
- $200 million for improvements to water conveyance systems in the San Joaquin Valley that have been damaged by subsidence due to groundwater pumping;
- $500 million for multi-benefit land repurposing; and
- $60 million for State Water Efficiency and Enhancement Program grants to fund farmers’ irrigation efficiency.
$708 Million in Additional Funding Proposed for Wildfire and Forest Resilience
The May Revise calls for $708 million to be spent on Wildfire and Forest Resilience in FY 2021-22. Combined with $536 million in “early action” funding signed into law earlier this year, “These investments result in a total $1.24 billion wildfire and forest resilience funding over two years to improve public safety across California’s most wildfire-vulnerable communities and significantly increase the pace and scale of forest management projects,” according to the Governor’s Budget Summary.
As noted in last week’s Legislative Bulletin, Senate Budget Subcommittee No. 2 on Resources, Environmental Protection and Energy has issued an alternate proposal: funding wildfire resilience at $1 billion/year over the next five years, with $4 billion in funding from this year’s General Fund and $200 million annually from the state’s cap-and-trade program. Wildfire and Forest Resilience is likely to be an area of significant negotiation between the Administration and Legislature in advance of the Budget’s finalization.
Newsom’s Small Business Relief Proposal
On Thursday, Newsom unveiled his proposed Small Business Relief Proposal. Most significantly, the Small Business Relief Proposal calls for an additional $1.5 billion infusion into the California COVID-19 Small Business Relief Grant Program, which provides grant awards of $5,000 to $25,000 to small businesses impacted by the pandemic. Other elements of the Proposal include:
- $895 million in investments to the State Small Business Credit Initiative, which works to strengthen state programs that support financing of small businesses;
- Increasing the CalCompetes tax credit program to $360 million and establishing a $250 million grant program to incentivize businesses to relocate to California; and
- $147 million for the Main Street Small Business Tax Credit to assist small businesses that have hired and retained workers since the second quarter of 2020.
In announcing the Small Business Relief Proposal, Newsom also touted his April 29 signing of AB 80, which conformed California tax law to the federal government’s treatment of COVID-19 relief loans such as Paycheck Protection Program loans and Economic Injury Disaster Loans. The Administration on Thursday called this “$6.2 billion tax cut for businesses…the largest state small business tax cut in history.”
Climate Smart Agriculture for Sustainability and Resiliency
The Governor’s May Revise proposes $532 million for climate-smart agriculture aimed at improving the sustainability and resiliency of the state’s agricultural sector. Included in the Governor’s plan is:
- $193 million to the FARMER program for the replacement of agricultural harvesting equipment, pumps and tractors to reduce greenhouse gas emissions;
- $150 million for alternatives to open agricultural burns in the San Joaquin Valley;
- $70 million to the Healthy Soils Program to provide grants for soil management practices that sequester carbon;
- $60 million for livestock and dairy methane emission reduction technologies; and
- $30 million for pollinator habitat.
Other significant budget proposals include a Golden State Stimulus Plan to provide $12 billion in tax rebates to Californians making up to $75,000/year, $8.75 billion to house the homeless and $14.5 billion “to reimagine our public schools.” CCA will monitor ongoing budget negotiations among state lawmakers and keep you apprised of major developments in advance of the final budget’s release by the June 15 Constitutional deadline.
Governor Newsom Expands Drought Declaration to 39 Additional Counties
Late last month, Governor Gavin Newsom issued a proclamation declaring a state of emergency “in Mendocino and Sonoma counties due to drought conditions in the Russian River Watershed.” As previously reported in Legislative Bulletin, however, Newsom was hesitant at that time to issue a statewide drought declaration, stating that “We have to target our solutions regionally.”
While Newsom still has not issued a statewide drought emergency, last Monday the Governor issued a proclamation finding a state of emergency “to exist in the Klamath River, Sacramento-San Joaquin Delta, and Tulare Lake Watershed Counties due to drought.” Those watersheds cover 39 counties, bringing the total number of counties with operative drought declarations to 41.
The order enables the State Water Resources Control Board (SWRCB) to modify reservoir releases “to conserve water upstream later in the year in order to protect cold water pools for salmon and steelhead” and to improve water quality.
According to a press release from the Governor’s office, “The state of emergency also enables flexibilities in regulatory requirements and procurement processes to mitigate drought impacts.” The proclamation further directs the SWRCB to “consider emergency regulations to curtail water diversions when water is not available at water right holders’ priority of right or to protect releases of stored water.” The SWRCB previously curtailed water diversions for the Sacramento-San Joaquin Delta and Russian River watersheds in 2014 and 2015 at the height of the previous drought.
CCA will continue to keep you apprised of any state and federal actions taken in response to California’s ongoing, extreme drought conditions.
Biden Administration Releases Initial “America the Beautiful” (30×30) Report
A week after taking office, President Biden issued an “Executive Order on Tackling the Climate Crisis at Home and Abroad.” Among other things, the Order directed the secretaries of the Interior, Agriculture and Commerce Departments and the Chair of the Council on Environmental Quality to submit a report “recommending steps that the United States should take…to achieve the goal of conserving at least 30 percent of our lands and waters by 2030.”
Early this month, the Administration released the report, which rebrands the “30 by ’30” initiative as “America the Beautiful.” According to CCA affiliate the National Cattlemen’s Beef Association (NCBA), the report “includes many of the priorities that are most important to cattle and sheep producers, including the protection of private property rights, learning from successful working lands management, and leveraging the expertise of ag producers for the benefit of lands, wildlife, and all land users.”
The report specifically identifies “six recommended areas of early focus for the Biden-Harris administration’s efforts to conserve and restore America the Beautiful.” One of those six priorities is to “incentivize and reward the voluntary conservation efforts of fishers, ranchers, farmers, and forest owners,” and the report identifies the 2023 Farm Bill as an opportunity for the Legislature to enhance federal programs that incentivize farmers’ and ranchers’ good stewardship.
CCA will continue to work with NCBA to shape the Administration’s “America the Beautiful” proposal, ensuring it recognizes and reflects the vital role that cattlemen play in stewarding the nation’s land, water and wildlife resources. CCA will continue to keep you informed about developments on both the federal “America the Beautiful” proposal and California’s own “30 by ’30” initiative.
Brand Inspection Fees to Decrease Starting July 1
Last week, the California Department of Food and Agriculture’s (CDFA) Bureau of Livestock Identification (BLI) announced that starting July 1 the price of inspection fees will be lowered by 10 cents per head of cattle. In a press release announcing the change CDFA explained, “The Bureau’s advisory board and CDFA Secretary Karen Ross made the determination due to a budget surplus in the program that developed after the BLI moved to mobile applications that lessened the amount of time spent on paper work.”
“We are pleased to be able to lower fees and as a result leave our livestock producers with a little more money for their operations,” Secretary Ross said in the release. “We commit to regular reviews of fee structures in all of our programs and will make adjustments when necessary and/or warranted. I want to thank our Bureau of Livestock ID for an outstanding job in keeping expenses to a minimum.”
Cattlemen’s Beef Board Now Accepting Producer Nominations
Interested in helping shape the beef checkoff? Now is your chance to get involved! The USDA Agricultural Marketing Service is seeking nominees for the Cattlemen’s Beef Promotion and Research Board now through June 6, with three seat openings for the Southwest Unit (California and Nevada).
The Board is authorized by the Beef Promotion and Research Act of 1985 and is made up of 101 members representing 34 separate states, four units of geographically grouped states and one importer unit.
Any beef producer who owns cattle may be nominated. Producers must be nominated by a USDA certified producer organization (including CCA) and submit a completed application. USDA will select appointees from the nominated producers.
Interested California producers should express their interest in serving to Lisa in the CCA office at email@example.com by June 1. To learn more about the Cattlemen’s Beef Board and being nominated, click here.