Governor’s 2024-25 January Budget Cuts Major Programs and Delays Implementation of New Laws

Many industry stakeholders focused the lack of funding allocated toward SB 253 and SB 261 – two climate related bills passed last year that would mandate corporate disclosure of GHG emissions and climate related practices. Specifically, SB 253 was marked with an $11 million price tag by the California Air Resources Board (CARB). The governor mentioned during his press conference that there will be a drastic cut in agency spending, and since SB 253 would create a new program within CARB, it didn’t make it into this version of the budget.

It is important to remember however, that even though program funding may not be part of this proposal, it may still be added into the governor’s May-revise budget later this year. In addition to postponing the implementation of these climate related bills, Governor Newsom has postponed the implementation of the health care worker wage increase to $25/hour until the state’s fiscal outlook improves.

Most notably for CLFP membership, the governor’s budget proposal cut the $18.8 million General Fund allocation to the Food Production Investment Program (FPIP) at the California Energy Commission (CEC). For those who are not familiar, FPIP is an incentive-based program that provides grants to help food producers reduce GHG emissions through the adoption of advanced energy technologies. Although this year’s allocation was cut, the budget maintains $46.2 million to the CEC for this program that has not been subscribed. CLFP will release information as soon as it is available on these remaining funds and the application process.

Other programs that have funding opportunities for our membership include the California Department of Food and Agriculture’s California Farm to School Incubator Grant Program. Similar to the FPIP program, these grants aim to support projects that build climate resilience and create scalable and sustainable change in the school food system. Producers that provide commodities to school programs can apply for funds to:

1) Increase production, processing, and/or distribution capacity to sell whole or minimally processed food to schools;

2) Establish or enhance the use of climate smart agriculture practices, production systems, other regenerative strategies;

3) Establish new or expand existing hands-on food education opportunities for students that complement the applicant’s existing or project-related food sales to schools, such as field trips, producer visits to the cafeteria or classroom, etc.; and

4) Improve infrastructure: Greenhouses, high tunnels, fencing - Improvements to existing buildings - Electrical systems - Grading or paving of roads or driveways - Plumbing, drainage, venting - Technology improvements such as fees for providing broadband or fiberoptic systems and fees for software systems - Other producer infrastructure to support sustainable production, processing, and/or distribution for school meals.

If you would like to review eligibility and a comprehensive list of grant projects, please visit CDFA’s website.

CLFP will continue to monitor the proposed budget as it evolves over the next few months. The Legislature has until June 15 to pass the final budget, and until July 1 to come to an agreement with the governor.