Now What?
After Tuesday’s election, all we know is that the Governor Schwarzenegger and the legislature will have to hash-out a $21-24 billion budget solution within the next few weeks. The Governor released a summary of his budget solutions prior to the election, although specific details have yet to be revealed. In order to close the budget gap, he’s proposing a combination of cuts, borrowing and other measures that are unprecedented in their magnitude, and perhaps, politically undoable.
In order assess the potential impact on the Department of Food & Agriculture, we met with AG Kawamura and his leadership team to discuss the department’s prognosis. CDFA’s 2008-09 budget is about $98.5 million in General Fund appropriations. Of that amount, approximately $92 million is expended on core services encompassing agricultural plant and animal health activities, pest prevention and food safety services. CDFA has been directed to reduce current year expenses 5%. Thus, effective July 19, the California Animal Health and Food Safety Lab located in Fresno will be shut down. Most of its testing services will be redistributed to other labs in Davis, Turlock, Tulare and San Bernardino. The closure represents 28 people and 38 positions. At least $2 million in additional cuts are still pending. Depending budget negotiations over the next several weeks, CDFA may be
forced to absorb further cuts as well.
On Thursday, the Legislative Analyst Office released its recommendations to the Legislature regarding program cuts and revenue increases to help balance the budget. Over 80 recommendations were offered, including the following agricultural related General Fund supported budget items for 2009-10 and 2010-11 Budget years:
Program Cuts
- Higher Education - Research and non-instructional staffing $332.2 million (This would impact agricultural research and cooperative extension.)
- CDFA – Suspend $8 million from various plant health and pest management programs.
- State Water Board – Eliminate $21.2 million for TMDL program.
- Dept. of Water Resources – Eliminate $11.8 for Irrigation Management Information and Delta Levees.
Fee Increases
- Office of Environmental Health Hazard Assessment - $10 million to cover regulatory activities.
- State Water Board – $53.2 million for permitting, enforcement and management activities.
Repeal Tax Exemptions
- Board of Equalization - $1.4 Billion includes animal feed, seeds, plants, fertilizers, livestock medication, farm equipment, and diesel fuel (Other non-agricultural goods are also included in the total.)
The Ag Council will be actively engaged in the budget debate and will keep everyone informed as events unfold.
USDA Cooperative Service
The Ag Council joined with cooperatives and related groups from across the country on a letter to USDA Secretary Vilsack urging a revamping of the Cooperative Service program. Spearheaded by the National Council of Farmers, the purpose is to call attention to the need to restore critical resources to the Cooperative Service program. From a former staffing level of about 75 cooperatives specialists, the program today is down to only about a dozen cooperatives specialists, who are frequently required to do work that does not involve cooperatives. The letter urges the Secretary to:
- Revisit the Department’s mission at the highest level to define the Department’s critical roles in supporting farmer-owned and other rural cooperatives
- Consider structural and administrative changes to protect the program and its professionals from dilution of purpose
- Redefine and fill staff positions, including those for cooperative finance, accounting, law and commodity specialty areas, and seek multi-skilled advisors
- Restore the cooperative information/publications staff (which was moved to the Rural Development public affairs office) to its appropriate place within the cooperative program
- Assemble a high-level group of industry, organizational and public officials to guide the Department’s revitalization of its cooperative program
Hours of Service
At the end of April, the Commercial Vehicle Safety Alliance (CVSA) issued a press release claiming that drivers operating under the 100-mile radius agricultural hours-of-service exemption were at higher risk of accidents and violations than other drivers. Therefore CVSA is proposing that all motor carrier safety exemptions sunset on a date certain and be reapplied for through the federal regulatory process. California’s hours-of-service exemption could also be at question should this proposal move forward. Late last week, the National Council of Farmer Cooperatives signed onto a letter along with 50 other organizations, urging Congress to keep the exemptions intact. While there is no apparent Congressional action at this time, Ag Council remains watchful of the issue.
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