Gov. Gavin Newsom on Wednesday unveiled his budget proposal for the coming fiscal year. He plans to cut some programs, delay others, lean on a climate bond and dip into reserves to balance the budget.
Newsom accused reporters of portraying the financial situation as more dire than it really is. His office estimates the shortfall is $38 billion, not the $68 billion the Legislative Analyst’s Office projected last month. The discrepancy tends to narrow after the tax deadline, he explained.
The budget plan includes the second half of a $6 billion cut to a $54 billion climate package passed in 2022. It would delay another $1.9 billion in climate spending and shift $1.8 billion to the cap-and-trade fund.
Specific to agriculture, the plan would cut long-delayed drought relief to farmers by more than 40%. It would shift $24 million for livestock methane reduction from the general fund to cap-and-trade dollars and delay it a year, and it would pull back $23 million for enteric methane. The Food Production Investment Program would lose $18 million.
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The Department of Pesticide Regulation will once again attempt to increase the mill assessment to address its structurally imbalanced budget. The increased tax on pesticide sales would fund 117 positions and generate $33 million over the three-year phase-in. The added money would also support the administration’s sustainable pest management agenda, according to the proposal, though DPR has long denied claims it would apply the mill increase to that.
Ports are racing to meet aggressive climate mandates as well and would lose a considerable amount of state support in that effort. The plan would cut $24 million for converting drayage trucks to ZEVs. The Port of Oakland, which ships most of the state’s agricultural products, would lose $96 million set aside for improvements. The budget would also delay $100 million for port and freight infrastructure.
The administration is dedicating $6 million—with $7 million in ongoing funding—to boosting resources for the State Water Resources Control Board to take on more federal duties in light of the Sackett v. EPA decision limiting the Clean Water Act. Such added costs are typically passed on to fee payers later.
