in the KNOW

May 18, 2012

Gov Announces “More Painful Reductions” in Revised Budget

Governor Jerry Brown

With a state budget deficit that’s grown to $15.7 billion, Governor Jerry Brown released a revised 2012-2013 budget plan, known as the “May revise,” early this week. The plan includes deeper cuts from his January budget proposal for a total of $8.3 billion in state budget reductions in the areas of state employee compensation, welfare, health care, higher education, courts, agriculture and others.

Under the revised budget, The California Department of Food and Agriculture (CDFA) faces $2.5 million in additional reductions this budget cycle. In a call to stakeholders earlier this week, CDFA Secretary, Karen Ross, said she will again seek input from the ag consortium that has provided direction on budget cuts over the past year. Ag Council President, Emily Rooney, will continue to be an active participant in the stakeholder consortium to provide advice regarding reductions, which are expected to be nailed down over the next few weeks. The key is to protect the core operations of CDFA that are crucial to the agricultural community, such as protecting against plant and animal pests and diseases.

As background, $31 million in General Fund budget reductions have already been made to the CDFA budget (in addition to the $32 million in reductions to fairs) in the current and previous budget cycles. The cuts include approximately $27 million in reductions to programs at CDFA. About $3 million must be generated in industry fees in an effort to protect the remaining programs vital to agriculture as it conducts business throughout the U.S. and globally.

The legislature will now consider the Governor’s budget as it seeks to create a final budget by the June 15th state constitutional deadline for the Legislature to approve a budget.

In addition to the revised budget, the Governor is seeking voter-support for a tax measure on the November ballot to pay for public schools and other state services. The measure comprises a quarter-cent sales tax increase for four years, along with a one percent income tax increase for joint filers earning over $500,000, a two percent income tax increase on incomes over $600,000 for joint filers and a two to three percent increase on incomes over $1 million for joint filers. The income tax increases would last for seven years beginning this year.

It is important to note that the tax measure is the cornerstone to the Governor’s budget, as his budget assumes voters will approve the taxes. If the tax measure is not approved by voters in November, $6 billion in additional state cuts go into effect in early 2013.


Ag Council Legislative Reception

Ag Council members are encouraged to attend our upcoming annual Legislative Reception on June 5th at 5:45 p.m. at the Citizen Hotel-Metropolitan Terrace located at 926 J Street in Sacramento. We hope to see you there.

Also, if you are an Ag Council member and would like to join us for our Legislative Day on June 5th to connect with administrative and elected state officials on key issues, please contact Rebecca Osumi at ph. 916.443.4887 or rebecca@agcouncil.org for further details. All Ag Council members are welcome.