LEGISLATIVE BULLETIN

January 15, 2024

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Newsom Releases Proposed 2024-25 Budget 
Governor Gavin Newsom on Wednesday released his Proposed Budget for Fiscal Year 2025. The Proposed Budget totals $291.5 billion with a projected budget deficit of $37.9 billion (far lower than the $68 billion forecasted by the Legislative Analyst’s Office last month). Wednesday’s Budget release previewed how Governor Newsom plans to close that funding gap: among other provisions, the Proposed Budget would draw $13.1 billion from the state’s reserves (primarily the Budget Stabilization Account known as the state’s “rainy day fund”), reduce existing budget allocations by $8.5 billion (including $2.9 billion in funding reductions to climate programs) and delay $5.1 billion in funding spread out from FY 2026 through FY 2028.

During his press conference Wednesday, Newsom was clear that he does not support addressing the budget shortfall with a wealth tax; that same day, a wealth tax proposal by Assemblyman Alex Lee (D-San Jose) was held in the Assembly Revenue and Taxation Committee.

In addition to the $2.9 billion in funding cuts to climate programs noted above, Newsom’s budget would delay an additional $1.9 billion in climate spending to future years (the Governor claims, however, that these funding cuts will be offset by approximately $10 billion in funding from the federal government). Included in the cuts is $23 million of the $25 million allocated in last year’s budget for the California Department of Food and Agriculture’s Enteric Fermentation Incentive Program (the Department’s Livestock Methane Reduction Program, meanwhile, is proposed to be shifted from the General Fund to the Greenhouse Gas Reduction Fund (GGRF)).

The Proposed Budget largely leaves wildfire expenditures untouched. Prior Budgets allocated $2.8 billion over a period of four years for wildfire resilience. While Newsom has proposed $100.7 million in spending cuts to wildfire and forest resilience programs (including a $5.3 million reduction in spending on prescribed fires and hand crews), “The Budget maintains $2.7 billion of these investments over five years to advance critical investments in restoring forest and wildland health to continue to reduce the risk of catastrophic wildfires in the face of extreme climate conditions.” Additionally, the Governor proposes that $162.5 million in spending for wildfire resilience be shifted from the General Fund to the GGRF.

Importantly, Newsom’s proposed budget allocates no funding to implement last year’s CCA-opposed SB 253, the “Climate Corporate Data Accountability Act,” which requires companies doing business in California with annual revenues over $1 billion to annually report their greenhouse gas emissions to the California Air Resources Board – including “scope 3” emissions related to the companies’ entire supply chains. Implementation of the bill is estimated to cost $11 million; it is unclear to what extent CARB would be able to implement the legislation’s provisions if not funded in the final budget.

The Governor will release a “May Revise” of his Budget later this year when the state has a clearer outlook on tax revenues after the April 15 income tax filing deadline, and Budget negotiations between the Legislature and Administration will continue through late June ahead of a June 30 deadline to pass the 2024-25 Budget. For more information on the Governor’s Proposed Budget, see the February edition of California Cattleman.

CDFW Projects that Wolf Compensation Program Funding Has Been Exhausted
The California Department of Fish and Wildlife (CDFW) on Friday updated its Wolf Livestock Compensation Grants program webpage with a notice informing livestock producers that all available funds under the program have likely been encumbered, jeopardizing future compensation claims from livestock producers impacted by wolves. The statement from the Department reads:

“To date, the Department of Fish and Wildlife has received a total of 102 grant applications for the CDFW Wolf Livestock Compensation Interim and Pilot Program that are projected to exhaust the current fund. As we work to continue evaluation of the submitted applications and process payments, there may not be sufficient funds available for applications submitted from this point forward.”

A “wolf conflict compensation pilot program” was established with $3 million in initial funding via SB 170, the Budget Act of 2021. The program had three “prongs”: (1) compensation for direct loss of cattle from wolf depredations, (2) compensation for the costs of implementing wolf deterrents and (3) a ‘pay-for-presence’ program. By last November the Department had already expended roughly $1.3 million, primarily on the first two prongs of the program. The pay-for-presence program was finalized in May of 2023, and applicants could seek compensation retroactive to the September 2021 signing of SB 170. It appears that the influx of applications under this prong rapidly depleted the remaining funds in the Compensation Program.

CCA firmly believes that ranchers should be compensated for the impacts of wolf presence so long as the species remains fully protected – and thus unmanageable – under the California Endangered Species Act. CCA is seeking additional funding for the Wolf Compensation Program in this year’s Budget, though the state’s substantial deficit is a complicating factor in that effort.

CDFA and USDA Wildlife Services Release Draft Wildlife Management Analysis
The California Department of Food and Agriculture and the California State Office of USDA APHIS Wildlife Services announced Friday that the agencies have completed a draft Environmental Impact Report (EIR) and Environmental Impact Statement (EIS) analyzing the environmental impacts of the agencies’ wildlife damage management activities in California. The draft’s release kicks off a 60-day public comment period during which the agency will accept feedback on the proposed wildlife damage management program.

The Draft EIR/EIS has been several years in the making. CCA members will recall presentation on the joint analysis by Wildlife Services and consulting firm Dudek at the 2019 CCA Midyear Meeting and 2019 Annual Convention, and CCA provided scoping comments for the proposal in late 2020.

CCA is hopeful that the EIR/EIS will resolve California Environmental Quality Act (CEQA) concerns that have spurred litigation in numerous California counties and resulted in some of those counties terminating their wildlife damage management program agreements with Wildlife Services. CCA will thoroughly review the draft environmental assessments and provide input to the agencies ahead of the March 12 comment deadline.

The agencies have announced a February 8 virtual public comment meeting to accept feedback on the project proposal. Ranchers and other members of the public can also provide written feedback through March 12 by emailing [email protected] or by submitting online via Regulations.gov.

New Episode of Stories from California Cattle Country
The first episode of season three of Stories from California Cattle Country, “On fire: with Dave Daley in Oroville” is out now! To listen to the episode click here. Stories from California Cattle Country is produced by the California Cattlemen’s Foundation with Support from the California Cattle Council.

New Name for Weekly E-Newsletter Legislative Bulletin
Legislative Bulletin is getting a new name! Come Monday, Feb. 5, the weekly e-newsletter will hit inboxes with the title, California Cattleman Weekly. The name change is being made to reflect that the weekly e-neswletter includes an array of information, sources, news and legislative updates. Other than the new name, the weekly e-newsletter will have no change in content or delivery.

CattleFax Cow-Calf Survey Released
From CattleFax
CattleFax has introduced its annual Cow-Calf Survey. Information requested in the survey provides participants and the rest of the industry with valuable data regarding industry benchmarks and trends.

Survey participants will recieve a results summary packet, with useful benchmarking information that will allow managers and owners to evaluate their own operations. Items such as cow-calf profitability, tendencies of high and low return producers, regional data, and other valuable material are included. To receive the summary packet, a valid email address must be submitted. All individual results will be confidential and remain anonymous.

By completing the survey and submitting a valid email address, participants will also be entered in a drawing to win a $700 CattleFax voucher. The credit can be used for any CattleFax memberships, registration fees for education seminars (Corporate College and Risk Management Seminar), and/or registration fees for the annual Outlook and Strategies Session.

The survey can be accessed through the following link or by going to CattleFax.com, selecting the About tab at the top of the page, and then clicking on 2023 Cow-Calf Survey on the sidebar. The deadline to complete the survey is March 1^st, 2024.
2023 Cow-Calf Survey

For questions or concerns please contact Matthew McQuagge, Analyst, at 303-850-3407, or [email protected].

CARB Extends Clean Truck Check Reporting Deadline to January 31
The California Air Resources Board (CARB) has announced that January 31 is the deadline for vehicle owners subject to the Clean Truck Check regulation to report their vehicles to CARB’s Clean Truck Check database. The Clean Truck Check regulation – also known as the Heavy Duty Inspection and Maintenance Program – applies to nearly all non-gasoline vehicles (including diesel vehicles) with a gross vehicle weight rating of 14,000 pounds or more which operate within California. Along with the reporting requirement, the regulation requires vehicle owners to pay a fee of $30 per reported vehicle. For more information about the Clean Truck Check program, see last week’s Legislative Bulletin or CARB’s program webpage.

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Industry News

Why should all Californians pay for the fire insurance risk only a few face? Cal Matters “After State Farm said it would stop selling new home insurance policies in California, Insurance Commissioner Ricardo Lara responded that the state will explore new rules allowing insurance companies to consider climate change when setting their rates.” To continue reading, click here.

Mark Zuckerberg raising cattle with a diet of beer and nutsFOXBusiness “Mark Zuckerberg is raising cattle on his ranch in Hawaii and providing them with a unique diet. The billionaire Meta Platforms CEO, seeking to “create some of the highest quality beef in the world,” has taken up the pursuit of raising two types of cattle at “Ko’olau Ranch,” he said Tuesday.” To continue reading, click here.