This past week, Governor Gavin Newsom presented his proposed $227 billion budget for the 2021-2022 fiscal year, of which $164.5 billion is from the General Fund. The Governor’s proposed budget relies heavily on one-time expenditures, avoiding long-term liabilities, since the State’s out year projections predict reduced revenues. The resulting budget provides some good news, as well as some bad news for agriculture.

This proposed budget prioritizes the Governor’s goals of economic recovery, equity, climate resiliency and emergency response. Governor Newsom was clear that every budget allocation was made in an effort to achieve these four goals. On the good news side of the ledger, the Governor included significant money for tractor and harvester replace in Funding Agricultural Replacement Measures for Emission Reductions (FARMER), specifically $170 million one-time Greenhouse Gas Reduction Fund ($90 million in 2020-21 and $80 million in 2021-22) for the Air Resources Board.  He also included $30 million for California Department of Food and Agriculture’s (CDFA) Healthy Soils Program to provide grants for on-farm soil management practices that sequester carbon. The proposed budget also includes $60 million for Sustainable Groundwater Management Act (SGMA) Grants, and $40 million to CDFA for the State Water Efficiency and Enhancement Program (SWEEP) Grants that help farmers reduce irrigation water use and reduce greenhouse gas emissions from agriculture pumping.

Unfortunately, the proposed budget also included some significant bad news, and that is the Administration proposed a four-year phased in mil assessment increase for pesticides. The mil will be tiered based on EPA hazard designations, with the pesticides with highest toxicity being assessed the highest. At the end of the four years, those products will be paying approximately 45 mils. There will also be new money for DPR air monitoring and enforcement. The proposed budget will now go to the legislature for review and debate so stay tuned as to what actually gets approved later this year.