On January 10, Governor Newsom released the details of his proposed budget for the fiscal year starting in July 2025 and ending in June 2026 (FY 25-26). The proposed budget includes funding from Proposition 4 (a wildfire, water, and climate-focused bond measure approved by voters in November) for a number of programs CalCAN has advocated for, including the Healthy Soils Program (HSP) and the State Water Efficiency and Enhancement Program (SWEEP). The budget also includes funding to develop a new regional equipment-sharing program, inspired by legislation (AB 2313) authored by Assemblymember Steve Bennett and sponsored by CalCAN.
Disappointingly, the proposed budget does not include funding for the Alternative Manure Management Program (AMMP) or Organic Transition Pilot Program, both CalCAN priorities. CalCAN will advocate for restoring funding to these programs through the budget process and cap-and-trade reauthorization process this year (more on the latter below).
Budget Outlook: Balanced Budget for FY 25-26 but Projected Deficits in Years Ahead
Overall, the current budget outlook for fiscal year (FY) 25-26 is balanced with a small surplus of $363 million, thanks to proactive, multi-year fiscal decisions made by the legislature and Governor in 2024 and higher than projected income tax revenues driven by the recent stock market rally. This is a welcome change after the past two years of severe budget deficits. Still, the Newsom administration and independent legislative analyst’s office are urging caution about new spending due to projected budget deficits in the next few years and uncertainty related to the fiscal impact of the incoming federal administration’s policies (e.g., tariffs and trade wars, changes to social safety net programs such as Medicare, withholding wildfire disaster aid, etc.). Moreover, state agencies are still enacting across-the-board eight percent budget cuts as a result of last year’s deficit budget.
Given this context, the budget proposes no new general fund investments for programs CalCAN has historically advocated for.
Proposition 4 Bond Measure: The Main Source of Food and Farm Investments
Instead, the Governor proposes using expected revenue from Proposition 4 to fund a number of programs.
Programs Proposed to Receive Prop 4 Funding in FY 25-26:
Specifically, the budget proposal allocates the following funds in FY 25-26, all of which CalCAN advocated for through our campaign with the Food and Farm Resilience Coalition over the past four years:
- $38 million for the State Water Efficiency and Enhancement Program (SWEEP)
- $36 million for the Healthy Soils Program (HSP); an additional $26 million will be allocated in FY 26-27
- $200,000 to develop a new Regional Farm Equipment-Sharing Program; an additional $14 million will be allocated in FY 26-27 to implement the program
- $2 million for the California Farmland Conservancy Program (CFCP); an additional $9 million will be allocated in FY 26-27
- $12 million for the Multibenefit Land Repurposing Program (MLRP); an additional $51 million will be allocated in FY 26-27
- $19 million for Urban Agriculture Projects
- $10 million for the Certified Mobile Farmers’ Market Grant Program; an additional $10 million will be allocated in FY 26-27
- $10 million for Year-Round Certified Farmers’ Markets Infrastructure and Facilities; an additional $10 million will be allocated in FY 26-27
- $200,000 to develop a new Tribal Food Sovereignty Program; an additional $14 from Prop 4 will be allocated in FY 26-27 to implement the program
- $38 million for Fairground Resilience Centers
Programs Proposed to Receive Prop 4 Funding in Future Years:
Some of the programs CalCAN advocated for in Proposition 4 are not slated to receive funds in the Governor’s proposal until later years, including the following:
- A new land access and tenure program for beginning and socially disadvantaged farmers and ranchers (eligible for $30 million from Prop 4)
- The farmworker housing component of the Low-Income Weatherization Program (eligible for $10 million from Prop 4)
For more details on the administration’s expenditure plan for Proposition 4, see the Climate Bond Expenditure Plan Budget Change Proposal (also known as a “BCP”), which includes the table below. Note: this table does not include the Multi-benefit Land Repurposing Program, which is included in Proposition 4’s water chapter, nor the Fairgrounds Resilience Centers, which is included in Proposition 4’s extreme heat mitigation chapter.
Cap-and-Trade Reauthorization: An Opportunity for New Investments
The legislature has indicated they will begin negotiations this year to reauthorize the state’s Cap-and-Trade Program, which requires the state’s largest greenhouse gas emitting companies to purchase permits to emit greenhouse gas emissions (called “allowances”). The revenue from the program has generated an average of $4.2 billion per year in funding for the state’s Greenhouse Gas Reduction Fund (GGRF). The legislature and Governor have allocated approximately two-thirds of GGRF on a continuous basis to a handful of programs. The Sustainable Agricultural Lands Program (SALC), which funds permanent easements on farmland to limit urban sprawl, is the only agriculture program that has received a continuous appropriation (two percent of the GGRF). Legislators and the Governor make discretionary annual decisions about how to allocate the remainder of GGRF. The Alternative Manure Management Program (AMMP), Healthy Soils Program (HSP), and State Water Efficiency and Enhancement Program (SWEEP) have historically received funding from the discretionary portion of GGRF, but not reliably and not nearly enough to meet farmer demand.
In reauthorizing the cap-and-trade Program, the legislature will likely revisit and revise its GGRF investment strategy, including continuous appropriations. CalCAN will be advocating this year to both protect the continuous appropriation of two percent of GGRF for SALC and secure an additional continuous appropriation for a portfolio of multi-benefit agricultural climate solutions.
How You Can Support
To be successful in that effort, we will need a strong show of support from our network. Your elected representatives need to hear from farmers and other agriculture stakeholders about why you care about agriculture’s climate solutions and how it benefits your farms and communities. We invite you to participate through in-district calls and meetings with legislators, joining CalCAN’s lobby day in Sacramento on March 11, and sharing this news across local and social media.
If you’re interested in learning more about how you can support our efforts, please email our partner engagement manager CC Ciraolo at CC[at]calclimateag.org.
Next Steps in the Budget Process
The Governor will release an updated budget proposal in May, known as the May Revise. In the months between now and then, the legislature’s budget committees and subcommittees will hold a series of budget hearings to discuss the Governor’s proposal and the legislature’s priorities, as well as hear from advocates and stakeholders. We will keep you informed about this process in our blog and monthly newsletter.
