By Vicky Boyd

Now that Gov. Newson has presented his proposed state budget, there will be much discussion at the Capitol about issues that impact agriculture.

On first glance, Gov. Gavin Newsom’s proposed $222.2 billion state budget appears to be a win for agriculture with funding for a number of programs that benefit the industry. But delve deeper into the document, and much of the funding is designed to minimally offset the cost of regulations and laws imposed on growers, say San Joaquin Farm Bureau leaders.

“There are a lot of assumptions in this budget that aren’t necessarily positive for ag and not good for ag,” said SJFB Executive Director Bruce Blodgett. “When you start allocating funds to teach farmers how to trade their water and sell their water, it implies people are going to be short of water because of SGMA (Sustainable Groundwater Management Act), and water marketing may not be the answer.”

SJFB President David Strecker agreed, saying much of the funding for ag-related programs wouldn’t be needed if the state hadn’t imposed several mandates.

“They could throw all kinds of money into the ag sector, but the only reason they’re going to do that is because of all of the new rules and regulations,” he said. “It’s kind of throwing everyone a bone.

“There’s funding for some things. But the big question becomes is it enough funding to cover the entire state and the entire industry?”

For example, the state’s proposed 2020-21 budget includes $50 million from the Cap and Trade Fund for agricultural diesel engine replacement and upgrades for current Tier 2 and Tier 3 engines. But a California Farm Bureau analysis found the state would have to spend $175 million to meet the Air Resources Board’s goal of replacing 12,000 older tractors by 2024.

“There are a lot of people who aren’t going to get funding and will be stuck with old equipment they can’t use,” Strecker said.

The governor’s plan also includes $20 million in general fund dollars for the State Water Efficiency and Enhancement Program – or SWEEP – which provides grants to farms for agricultural water efficiency improvement. The grants are prioritized for areas with high-priority groundwater basins, including that underlying San Joaquin County.

In addition, the funding proposal contains $35 million for statewide implementation of SGMA, which would go to help underwrite local water conservation and groundwater recharge programs.

But such programs likely wouldn’t be needed had the state not implemented groundwater regulations, Blodgett and Strecker said.

The governor also included $260.9 million under his “broadband for all” effort to expand the technology into rural areas. Strecker questioned the benefits if state mandates force growers out of business.

“What good is broadband going to be in an area affected by SGMA?” he said. “They won’t have much of a need for it when the ground is fallowed.”

The California Department of Food and Agriculture budget shows a decrease to $600 million for 2020-21, down from $628.8 million in 2019-20. Most of the difference was from limited-term cannabis funding, which expires at the end of this fiscal year, said CDFA spokesman Steve Lyle.

Because the administration is looking to consolidate this program into a separate entity, the funding was not included in CDFA’s 2020-21 budget, he said.

CDFA’s budget also shows a decrease in pest prevention and food safety funding to $272 million in 2020-21 from $278 million in 2019-20. But San Joaquin County Agriculture Commissioner Tim Pelican said he doesn’t expect that to affect his department’s pest exclusion programs.

“Most of that funding, especially what goes to the counties, is from the specialty crop block grant in the Farm Bill, and those funds aren’t expected to be cut,” he said.

County agriculture commissioners also have access to unclaimed gasoline taxes, and Pelican said those funds have been earmarked for pest detection in San Joaquin County for the next three years.

Climate resiliency plan

As part of the budget, Newsom outlined his five-year, $12 billion five-year climate resiliency plan, which would include a new Greenhouse Gas Reduction Fund and a new revolving loan fund.

A portion of the plan’s funding would come from a $4.75 billion bond to be tentatively placed on the November general election ballot. It would help pay for reducing risks from water, fire, extreme heat and sea level rise.

Only five years ago, voters passed Proposition 1, or the Water Quality, Supply, and Infrastructure Improvement Act of 2014. It authorized $7.5 billion in general obligation bonds to pay for a number of water-related projects in the state. Of the total, $2.7 billion was to go toward water-storage projects.

The California Water Commission in 2018 awarded funds from the bond measure to a number of projects, including $816 million toward Sites Reservoir, but little has been discussed since.

“There’s been a lot about different proposals for water, but nothing seems to be happening very quickly,” Strecker said.

The $5 billion Sites Reservoir, located west of Colusa, was originally proposed in the 1980s. It would provide 1.3 million to 1.8 million acre-feet of off-stream storage, allowing capture of excess runoff during wet years to store for drier times.

Strecker admitted that projects, such as Sites, move slowly. But every wet winter without it is another opportunity lost, he said.

“You look at just the last couple of winters and a lot of the water that could have been stored wasn’t able to be stored and flowed out to the ocean,” Strecker said.

Talk of a single tunnel

The proposed budget also highlighted the administration’s support of a single tunnel under the Delta, a project SJFB has opposed since it was originally proposed as two tunnels. Calling Newsom’s move “somewhat expected,” Strecker predicted a long fight.

“We need to keep our eyes on it, but we don’t need to get overly anxious or out of control,” he said.

The Department of Water Resources in January announced it was beginning an environmental review as part of preparing an environmental impact report for the proposed Delta Conveyance Project.

What next with the budget?

Newsom unveiled the $222.2 billion draft spending plan Jan. 10, after which time legislators will review it and negotiate over programs and funding.

Of the governor’s proposed budget, nearly one-third – 32.1% – is allocated to health and human services. Another 27.7% goes to kindergarten to 12th-grade education, followed by 8.5% for transportation, 8.2% for higher education, and 7.4% for corrections and rehabilitation.

In addition to programs funded by the general fund, the budget also included a handful of proposed general obligation bonds that will be put before the voters.

The $15 billion “Health and Safety Bond Act of 2020,” for example, is scheduled for the March 3 primary ballot. The bulk of its money – $9 billion – would go toward K-12, with an additional $2 billion apiece going to University of California campuses, California State University facilities projects and community colleges.

In May, the governor will release a revised version of his proposed budget and include updated tax revenue projections.

Under the state constitution, the governor’s budget must be accompanied by a bill itemizing recommended expenditures that is introduced into both the state Senate and Assembly. The constitution also requires both houses pass the bill by June 15.