{"id":244942,"date":"2025-05-17T08:14:21","date_gmt":"2025-05-17T08:14:21","guid":{"rendered":"https:\/\/peraltafinancing.com\/agriculture\/advocates-call-for-reforms-and-dedicated-ag-funding-in-response-to-governors-cap-and-trade-proposal-calcan\/"},"modified":"2025-05-17T08:14:21","modified_gmt":"2025-05-17T08:14:21","slug":"advocates-call-for-reforms-and-dedicated-ag-funding-in-response-to-governors-cap-and-trade-proposal-calcan","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=244942","title":{"rendered":"Advocates Call for Reforms and Dedicated Ag Funding in Response to Governor\u2019s Cap-and-Trade Proposal – CalCAN"},"content":{"rendered":"


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On May 14, Governor Newsom released the <\/span>details of his revised budget proposal<\/span><\/a> for the fiscal year starting in July 2025 and ending in June 2026 (FY 25-26). The proposal maintains the Proposition 4 funding plan put forward in the Governor\u2019s January Budget for agricultural climate solutions. In his May Revise, the Governor committed to working with the legislature to reauthorize the state\u2019s Cap-and-Trade Program through 2045. Cap-and-Trade generates an average of $4.2 billion per year for the state\u2019s Greenhouse Gas Reduction Fund (GGRF) but is currently set to expire in 2030.\u00a0<\/span><\/p>\n

Under the current Cap-and-Trade authorization, five programs (including High Speed Rail) are guaranteed a specific percentage of GGRF revenues annually, totalling 65% of total GGRF revenue each year (see Figure 1 in <\/span>this report<\/span><\/a>). In addition to committing to reauthorization, the Governor outlined his top two investment priorities for the GGRF: $1.5 billion annually for CalFire for wildfire suppression and $1 billion annually for High Speed Rail. The Governor\u2019s proposal is silent on how the remainder of GGRF revenue should be allocated. Agricultural climate programs have historically received approximately 5% of GGRF investments, though with significant variability from year to year.\u00a0<\/span><\/p>\n

CalCAN and a coalition of 22 food and farming organizations are continuing to advocate for a <\/span>dedicated set-aside of GGRF funding to support a suite of proven agricultural climate solutions<\/span><\/a> and programs that increase resilience and ensure food affordability.\u00a0<\/span><\/p>\n

CalCAN is also part of a broader coalition of over 40 organizations <\/span>advocating for eliminating free allowances to the oil and gas industry<\/span><\/a> in the Cap-and-Trade Program. In 2024 alone, those free allowances were estimated to be valued at over $890 million. <\/span>Rather than subsidizing the fossil fuel industry, our coalition asks lawmakers to redirect those funds to protect communities from climate impacts and lower costs for California households.<\/span><\/p>\n

Budget Outlook: $12 Billion Projected Budget Deficit Due to Tariffs and Medi-Cal Costs<\/b><\/h2>\n

The budget outlook has deteriorated considerably since January, when the state was projecting a balanced budget. The state is now projecting a $12 billion budget deficit, equivalent to 6% of the state\u2019s overall budget, largely due to tariffs\u2019 impacts on the economy and increases in Medi-Cal costs. Given this budget context, budget proposals and legislation relying on new general fund expenditures face a difficult prospect.<\/span><\/p>\n

Revised Budget Proposal Maintains Proposition 4 Food and Farm Investments in FY 25-26<\/b><\/h2>\n

Thankfully, the revised budget proposal maintains the same proposed funding levels for <\/span>Proposition 4<\/span><\/a> investments for a number of programs CalCAN has advocated for, including the Healthy Soils Program (HSP), the State Water Efficiency and Enhancement Program (SWEEP), and a <\/span>new regional equipment-sharing program<\/span><\/a>. More specifically, the budget proposal still allocates the following funds in FY 25-26:<\/span><\/p>\n