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Governor releases updated budget plan for ’11-’12

Issue Date: May 18, 2011
By Christine Souza

Calling it an attempt to place the state of California on a more secure financial footing, Gov. Jerry Brown released a revised 2011-12 budget plan Monday that he said would pay off most of the $34.7 billion debt the state has built up over the last decade. Known as the "May Revise," the governor's plan would also reduce, by nearly $3 billion, the amount of taxes needed to balance the budget, includes new tax incentives and downsizes state government.

"California's economy is growing, but we still face a $10 billion structural deficit and a wall of debt for years to come," Brown said. "California's finances were plunged into turmoil by the Great Recession and a decade of short-term fixes and fiscal gimmicks. This is not the time to delay or evade. This is the time to put our finances in order."

Since taking office in January, Brown and the Legislature have cut spending by $9 billion and have taken other steps to reduce the deficit.

The California Department of Food and Agriculture, which receives one-third of its budget from the state General Fund, expects a reduction of $15 million in the 2011-12 fiscal year and is bracing for an additional $15 million loss the following year.

Included in the cuts are programs that are critical to agriculture, including plant and animal health, pest prevention, and weights and measures. A separate reduction would cut $32 million in support for fairs and expositions.

California Secretary of Food and Agriculture Karen Ross reached out to a number of the state's agricultural leaders to gain insight into how to achieve the first $15 million in General Fund reductions, said California Farm Bureau Federation Administrator Rich Matteis.

"The governor and the secretary did provide for significant participation by industry stakeholders in how to achieve those cuts. Every attempt was made to protect the core mission of the department, which is to protect the state's agriculture, the public, our natural areas and public parks from invasive pests—both plant and animal—and to ensure food safety," Matteis said.

"We think we did a pretty good job with what we had to work with in protecting that core mission, at least in this first round," he said.

As the next round of cuts is undertaken, Matteis said, Farm Bureau and other agricultural stakeholders will be there to help provide recommendations and input.

Ross said, "Identifying an additional $15 million for the next fiscal year is going to take a lot of work because we are really cutting to the bare bone of our fiscal situation here."

"We have no time to waste on getting our budget prepared for the next fiscal year, because that additional $15 million of reduction in General Fund will be even more challenging to achieve and I cannot do it alone," Ross said.

"I continue to thank and praise the ag community for coming to the table in the consortium process," she said.

The General Fund reductions that have already been taken by CDFA include targeted expenditures in the Plant Health and Pest Management Division, which includes some reductions in the hours of operation for border stations, less trapping in low-risk pest areas and reduced servicing of traps in high-risk areas.

Federal funds, which contribute another third to the CDFA budget, have also been squeezed.

"We are at a double jeopardy because the exercises that we're going through here at the state level are also happening at the federal level," Ross said. "About a third of our budget has been coming from the General Fund, a third from federal funds, and a third from industry and special funds."

That one-third support from the federal government, she said, "has absolutely been critical to the department's ability to actually take on more programs without increasing General Fund support over the last decade. Now we're looking at even being more dependent on that stream of federal dollars coming in."

Even with an increase in the three main sources of the state General Fund—rising sales, personal income and corporate tax receipts—Brown remains in pursuit of extending fees and taxes approved two years ago.

"I've been telling our membership, it is kind of like that year when you were figuring on getting 50 cents a pound for your commodity and you got 60 cents a pound. Next year, you might get 40 cents," California Farm Bureau Federation President Paul Wenger said. "Right now, the state is barely digging its way out of a hole, a hole that still exists."

Without the extensions, agricultural leaders say additional cuts to California agricultural programs and protections become more likely and would result in reduced services for farmers and ranchers.

"The second $15 million is going to be very tough," Wenger said. "If we don't get the tax extensions, it will have drastic, long-reaching and structural impacts to what CDFA provides for our agricultural economy."

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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