State Budget Update
Governor Schwarzenegger has signed the revisions to the 2009-2010 Budget Act, after cutting an additional $489 million in General Fund appropriations, to make-up for additional budget shortfalls.
The newly enacted budget contains approximately $24 billion in program cuts, borrowing and funding shifts. It was patched together based on an estimated $89.5 billion in General Fund revenues (paid by personal income, corporate and sales taxes). Of this amount, agricultural programs are receiving less than $250 million in General Fund support, which is primarily distributed to the following agencies:
$80.8 million - Department of Food & Agriculture: Although CDFA budget exceeds $300 million when industry fees, federal reimbursements and other special funds are counted, the General Fund portion is critical because well over 90% of these funds are allocated to Plant & Animal Health Protection, Pest Prevention and Food Safety. The $80.8 million of General Fund support is consistent with previous budgets, so it appears that CDFA has taken no major cuts to the General Fund programs at this time. However, as unexpected plant pest and animal health emergencies arise, the Department seeks special budget augmentations, which typically push their General Fund Budget into the $95-100 million range, so these funds remain questionable at this time.
$1,000 - Department of Conservation: These funds represent the suspension of the Williamson Act program for at least the next 12 months. Funds for this program through the Department of Conservation are allocated to counties for Williamson Act subventions. In previous years, General Fund support has been in the range of $35 million annually. Prior to budget deal, the entire current year funding of $34.7 had been eliminated. However, during the last minute budget negotiations, $27.8 million was restored, which represented an important compromise for agriculture. However, the Governor “blue penciled” all program funding, except for $1,000, effectively suspending the program.
$154 million – University of California: These funds are allocated to Agricultural Research ($90 million) and Cooperative Extension ($64 million.) Unfortunately, the budget deal included major cuts to the university amounting to $1 billion over two years. Program cuts will be determined by university officials and the regents. It’s anticipated that the cuts could amount to 20% across the board.
The Legislative Analyst’s Office created a synopsis of the July 2009 Budget Package, which can be located on LAO’s website at http://www.lao.ca.gov/laoapp/main.aspx.
The state’s underlying budget problems and related structural issues are far from being resolved. Therefore, we will continue to report on budget related issues as events unfold.
Federal Food Safety Legislation Passes House
After a failed first attempt at passing food safety legislation earlier this week, the House of Representatives successfully passed HR 2749 out of the House before they adjourned for August recess. Concessions were made on both sides of this issue to garner enough support for passage. Highlights of the bill include:
- Grants FDA mandatory recall authority, access to records and quarantine abilities
- Requires food safety plans (HACCP could work) for domestic and foreign food suppliers to enter commerce
- Mandated country-of-origin labeling requirements
- Requires food facilities to register with FDA on an annual basis
- Creates performance and traceability standards
- Exempts all meat, poultry and other programs that are operating under already existing USDA authorities from this bill (thus still putting fruit, nut, vegetable and dairy processors under FDA oversight)
- The original language required on-farm food safety practices, and that language has been taken out, but there is still language about on-farm record keeping
- There is confidentiality language included now for proprietary information.
Analysis is still be conducted on this bill as amendments were being drafted throughout the week. We expect more concessions in the Senate, with a full vote sometime this Fall.
During the Summer Recess, In the Know will be distributed intermittently based on news developments in Sacramento. Regular distribution will commence when the legislature returns from their summer break.
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