The Legislative Analyst’s Office (LAO) is warning the state budget deficit may be $7 billion worse than Gov. Gavin Newsom’s projections and is offering lawmakers ideas for further cuts.
Last month Newsom proposed $5.8 billion in cuts to climate, resources and environment programs. LAO agrees with one of the largest reductions in the sustainable agriculture package, the elimination of the $25 million Climate Catalyst Program. The administration has long pursued a low-interest loan program for emerging green technologies in agriculture—but that may have to wait a couple more years. Newsom would trim the same amount from sustainable ag lands conservation.
Newsom left untouched schools grants for purchasing locally grown foods—a program prized by First Partner Jennifer Siebel Newsom, CDFA Secretary Karen Ross and megadonor Kat Taylor. The state has invested $90 million on the program, but the LAO claims lawmakers can still claw back $60 million that has yet to be spent.

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The foursome has also supported an exponential increase in funding for the Healthy Soils Program during budget surpluses. Newsom proposed a $15 million cut to the program. But LAO says he could go further, pointing out CDFA has yet to award $85 million in funding for the current cycle. According to the analysts, “the program provides only modest GHG benefits at a relatively high cost per ton when compared to other programs.”
In 2021 Newsom put $90 million into a new program for repurposing fallowed farmland and plans to add another $20 million this year. But LAO reasons that money would not help with immediate and urgent drought impacts. The office is also questioning how effective the program is at addressing long-term land transition goals.

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