YOUR DUES DOLLARS AT WORK PROPOSED BUDGET WOULD CUT SIGNIFICANT CLIMATE INVESTMENTS IN FISCAL YEAR 2023-24 by CCA Vice President of Government Affairs Kirk Wilbur On Jan. 19, Gov. Gavin Newsom released his proposed 2023-24 State Budget. The $297 billion proposed budget is responsive to what the Administration forecasts as a $22.5 billion budget deficit (lower than the Legislative Analyst’s Office’s estimate of $24 billion) – a stark contrast to the historic surpluses of the past two budget cycles. As with other recent budgets, the Governor’s proposal prioritizes early education and seeks to address the crises of homelessness and housing availability. The Governor is not yet proposing to tap into the State’s roughly $23 billion in generalpurpose reserves to address the projected budget shortfall, and the Legislative Analyst’s Office has cautioned that the State should hold onto its available reserves in case of a recession. Of course, the Governor does not have the only word on whether to dip into State reserves, and the question of how to address the deficit will be subject to months of debate between the Legislature and Administration. Assembly Speaker Anthony Rendon (D-Lakewood) in January noted that “it’s early, but that’s what [the reserves are] there for. I’d rather dip into the rainy day fund than cut programs and services.” Instead of dipping into reserves, the Governor has proposed that the state seek to “close the budget gap” through funding reductions, delays, shifts and “trigger reductions.” In terms of reductions, the proposed budget seeks to outright eliminate $5.7 billion in expenditures previously authorized in the 2021 and 2022 Budget Acts. $3.9 billion in funding commitments for various programs between
10 California Cattleman March 2023
Fiscal Year 2021-22 and 2023-24 would be restored or reduced in the Governor’s 2024 Budget based on the “trigger” of whether there are sufficient funds for those programs in the State’s coffers next January. $7.4 billion in expenditures would be delayed over a multi-year period but not diminished and $4.3 billion in funding would be shifted from General Fund obligations to other state funding sources. Of particular interest to cattle producers are likely the modifications to roughly $54 billion in multi-year climate resilience investments made in the 2021 and 2022 Budget Acts. While a significant portion of this funding was earmarked to promote zero-emissions vehicles, decarbonize the State’s transportation infrastructure and “to expedite the state’s transition to clean energy,” much of that $54 billion investment was allocated to climate priorities such as wildfire and forest resilience, drought response and water resilience and climate smart agriculture. The Governor’s 2023-24 budget proposes to cut roughly $5.9 billion from the five-year climate investments allocated in the past two budget cycles. Of that total, about $3.1 billion would be placed in the trigger restoration fund and could be restored if the state’s fiscal outlook is significantly improved in January of 2024. Importantly, roughly $48 billion in the state’s recent climate investments will go untouched. Fortunately, the Proposed Budget retains most of the outlays made over the past two budget cycles for wildfire and forest resilience. Of $2.8 billion allocated to wildfire and forest resilience over the past two years, the Governor has proposed retaining $2.7 billion, or about 97 percent. The most significant cut would be a $41 million reduction in the Climate Catalyst Revolving Loan Fund; other proposed cuts in this area include stewardship of state-
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