The 2019-20 Budget: California Department of Food and Agriculture

The 2019-20 Budget: California Department of Food and Agriculture GABRIEL PETEK LEGISLATIVE ANALYST MARCH 2019 Summary In this analysis, we assess the Governor’s 2019-20 budget proposals for the California Department of Food and Agriculture (CDFA). Specifically, we review and make recommendations regarding the Governor’s proposals to (1) create a new Citrus Pest and Disease Prevention Division (CPDPD) within CDFA and (2) combine seven separate budget proposals into a single budget document. We also briefly discuss the Governor’s proposal related to safe and affordable drinking water. In summary, we recommend the following: • Citrus Pest and Disease Prevention. Approve the Governor’s proposal to establish a new CPDPD within CDFA in order to improve the effectiveness of CDFA’s efforts to suppress and eradicate pests that threaten the state’s citrus crops. Require the department to report at budget hearings on (1) why the measures it is currently implementing have been insufficient to stop the continuing geographic spread of Asian Citrus Psyllid (ACP) and Huanglongbing (HLB), (2) how the Governor’s proposal will address any shortfalls in the current program, (3) what targets and outcomes CDFA would use to measure the effectiveness of its ACP/HLB suppression efforts, (4) whether there are additional measures that the state should implement to suppress ACP and HLB, and (5) why CDFA estimates it will not spend all of the funds budgeted in 2018-19 for suppression and eradication of citrus pests. • Budget Transparency. Direct the administration to revert to the long-standing practice of providing standalone budget change proposals (BCPs) specifically for proposals that include (1) new positions; (2) funding for new activities; and/or (3) extensions of funding, activities, and/or positions that the Legislature previously had authorized only on a limited-term basis. We further recommend legislative staff and members request additional information about any of the seven proposals included in the Technical Adjustments BCP for which they believe additional detail and rationale is needed. DEPARTMENT OVERVIEW are conducted in partnership with county agricultural commissioners (CACs) and county sealers of weights CDFA is charged with protecting and promoting the and measures. state’s agriculture. The department manages programs The Governor’s budget proposes $566 million in the areas of (1) animal health and food safety, (2) crop from various funds for support of CDFA in 2019-20. inspection, (3) agricultural marketing, (4) enforcement This is a net decrease of $128 million, or 18 percent, of weights and measures, and (5) plant health and from the estimated current-year spending level. This pest prevention. Many of the department’s activities analysis full gutter 2019-20 BUDGET year-over-year decrease in spending is mainly that year, the total value of California’s oranges, explained by a few one-time appropriations made grapefruit, lemons, mandarins, and tangerines was in 2018-19 that are not proposed in 2019-20. The estimated at about $2.2 billion. About 90 percent of specific reductions include (1) a net reduction of California’s citrus industry is located in six counties $62 million from the Greenhouse Gas Reduction (Fresno, Kern, Tulare, Ventura, Riverside, and San Fund (reflecting a proposed spending reduction of Diego). In addition to commercial citrus crops, $74 million for methane reductions from dairies, CDFA estimates over 50 percent of residential partly offset by a proposed increase of $13 million properties have at least one citrus tree. for the Healthy Soils Program); (2) a net reduction HLB Is Fatal for Citrus Trees. ACP is a of $23 million in Proposition 68 (2018) bond non-native insect pest that serves as the vector funds mostly related to decreased spending on for HLB. When the ACP feeds, it injects a toxin the Healthy Soils Program and water efficiency; that causes citrus tree leaves to twist and die. and (3) a $15 million reduction in General Fund More importantly, ACP is the vector of the spending for grants to provide nutrition incentives bacterium that causes HLB, an incurable disease to CalFresh clients who purchase fruits and that eventually causes trees to die. Infected vegetables at farmers markets and funding to trees must be removed and destroyed to ensure small businesses to purchase energy-efficient they do not serve as a reservoir for the bacteria. refrigeration units. The first HLB-infected tree in California was confirmed in Hacienda Heights in 2012. HLB can CITRUS PEST AND have a significant effect on citrus production. DISEASE PREVENTION According to a study by the University of Florida, from 2006-07 through 2013-14 Florida’s orange production declined by an estimated 24 percent Background due to HLB. The economic impacts of HLB in California Partners With Federal and Local Florida over the eight-year period were estimated Agencies on Pest Prevention. State law requires to be losses of $7.8 billion in cumulative industry CDFA to prevent the introduction and spread of output, or an average annual loss of $975 million. injurious insects or animal pests, plant diseases, Industry Funds Suppression Activities. and noxious weeds. CDFA works in partnership The industry provides funding for ACP and HLB with many government and private organizations suppression activities through a self-assessment to implement the state’s pest prevention system of up to $0.09 per carton (equivalent to 40 pounds because invasive species concerns cut across of citrus fruit). Funds raised through the industry many different jurisdictions. For example, the self-assessment—as much as $21 million in recent U.S. Department of Agriculture focuses its pest years—are deposited into the Citrus Disease prevention efforts on pests of nationwide concern Management Account in the Food and Agriculture and preventing pests from entering from foreign Fund. Until 2017-18, the industry also provided countries. CDFA’s Plant Health and Pest Prevention about $500,000 per year to reimburse CDFA for Services (PHPPS) Division and CACs focus on citrus grove surveys that involve trapping insects state and local pest prevention efforts. Agricultural and analyzing the results of trapping efforts. In industry groups primarily focus on pests of concern addition, the state and federal governments have to a specific commodity group. For example, provided funding for suppression and eradication in recent years the citrus industry has provided activities in prior years. In 2018-19, the department funding for the state’s efforts to detect and estimates it will spend a total of $41 million eradicate ACP, an insect that is a vector for HLB, a (of $49 million budgeted) on suppression and disease fatal to citrus trees. eradication activities which we discuss in more Citrus Is a Major Crop in California. detail below. This amount includes $10 million in According to CDFA, in 2017 California accounted one-time General Fund support and $16.3 million for 51 percent of the U.S. citrus production. In from the Food and Agriculture Fund. 2 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET PHPPS Division Leads Pest Control Efforts. Angeles County, delaying survey, treatment, and The PHPPS division (one of five divisions at CDFA) HLB tree removal activities. investigates the existence of pests, determines the California Citrus Pest and Disease Prevention probability of a pest spreading, and determines Committee (CCPDPC) Recently Released an the feasibility of its control or eradication. Then Action Plan. Chapter 426 of 2009 (AB 281, PHPPS takes action to suppress and/or eradicate de León) created in CDFA the CCPDPC (consisting a pest. Upon detection of ACP or HLB in a new of citrus producers, citrus nursery operators, and area, quarantine boundaries are created by PHPPS. one public member) and gave it the authority to Hold notices are then placed on all businesses or develop—subject to the approval of the Secretary properties where citrus nursery stock; host plants; of CDFA—a statewide citrus specific pest and or citrus fruit is grown, processed, or stored. After disease work plan. Accordingly, in December 2018, an emergency quarantine becomes effective, the CDFA released an action plan for ACP and HLB agreements are signed with these entities to allow in California. The action plan includes the following the movement of fruit and nursery trees within priorities: and out of the quarantine area under specific • Quickly detect and eradicate diseased trees conditions, such as passing an inspection. Ongoing by improving the urban survey and sampling enforcement and oversight visits occur (no less processes, continuing quick mandatory tree than monthly) to ensure the entities are adhering to removal of infected trees, and collaborating the compliance agreement conditions. with the scientific community on early A key objective of PHPPS’s ACP/HLB detection efforts. suppression and enforcement activities is to • Control movement of psyllids around the prevent HLB from spreading to commercial citrus state and enforce regulations by increasing groves. In counties considered to be infested with enforcement staff with emphasis in HLB ACP, growers engage in area-wide management quarantine areas and implementing a regional activities. For example, growers in Riverside, ACP quarantine with performance standards. Imperial, Ventura, San Bernardino, Santa Barbara, and San Diego Counties have transitioned to • Suppress psyllid populations by promoting area-wide ACP management which requires grower participation in area-wide treatment that CDFA conduct residential buffer treatments programs, removing uncared for host plants, around commercial groves that participate in the continuing to use biocontrol (such as wasps), coordinated area-wide treatment. and continually assessing urban treatment protocols. The PHPPS division includes a total of 641 permanent positions and 300 temporary • Use outreach and collaboration to encourage (seasonal) positions. Three of these staff are homeowner and industry participation in dedicated solely to the citrus program. Other staff program efforts and foster local governments’ that work on ACP/HLB activities usually also work support for program activities. on other pest and disease prevention activities in CDFA has stated its intent to sustain and protect addition to their work with the citrus program. commercial production of citrus in California ACP/HLB Suppression and Eradication through the implementation of the action plan for Activities Are Sometimes Affected by Other ACP/HLB. Pest Outbreaks. Core citrus program activities can be delayed or not conducted at all if emergencies Governor’s Proposal such as fruit fly or other significant agricultural pest Establish New CDFA Division for ACP infestations occur. For example, in November and and HLB Suppression and Eradication. The December 2017, the majority of the staff working Governor’s budget plan for 2019-20 proposes on the citrus program were redirected to work on to establish a new division within CDFA, called a major Mediterranean Fruit Fly infestation in Los CPDPD. According to the administration, the www.lao.ca.gov 3 analysis full gutter 2019-20 BUDGET division would be focused on carrying out HLB administrative functions in support of the new eradication and ACP control efforts in a systematic division. and consistent manner that addresses local In addition to the 226 positions in the new conditions, and would allow the state to augment CPDPD, the Governor’s budget plan proposes current quarantine regulation enforcement activities four new administrative positions to carry out in existing and newly detected areas. It is the administrative and support functions related to intent of the administration in creating the new the new division. These four positions would division dedicated to citrus pest prevention to be assigned to CDFA’s Office of Information avoid interruptions to ACP/HLB suppression and Technology (IT) Services and Division of eradication efforts such as what occurred when Administrative Services. there was a Mediterranean fruit fly infestation in Los As shown in Figure 1, under the Governor’s Angeles County in late 2017. budget plan, total spending on suppression and The Governor’s budget plan proposes a eradication of ACP and HLB would be $40 million in $5 million augmentation ($2.5 million from the 2019-20. This reflects a slight decrease compared General Fund and $2.5 million from the Food and to the current year and the recent peak level of Agriculture Fund) and 65 new positions. The new program funding of $43 million in 2017-18. In CPDPD would consist of 226 positions as follows: the four years prior to 2017-18, year-over-year • 106 existing permanent positions and spending in this area steadily grew. 56 existing seasonal staff positions currently LAO Assessment working in PHPPS on the citrus program and other activities would be reassigned to ACP and HLB Continue to Spread. Data CPDPD. According to the department, these indicates that the area affected by ACP and HLB staffing levels reflect the estimated amount has increased substantially in California in recent of time PHPPS staff spend on ACP and years. Figure 2 shows that from 2012 through HLB-related activities. 2018 the number of counties where ACP has been • 61 new permanent positions would be detected more than tripled from 9 to 28, and the established consisting primarily of new number of counties with an HLB infected tree grew management staff, analytical scientists, and from one to four. Over this period, the number of field staff. Of these positions, 31 would be square miles under quarantine for ACP more than funded from existing budget authority and tripled from 25,813 to 87,656. Similarly, between 30 would be funded with money requested in 2014 and 2018 the number of square miles under this proposal. quarantine for HLB increased more than nine-fold, • 3 existing permanent positions that currently from 92 to 850, and the number of trees identified work full time on the citrus program would as infected with HLB grew from 1 to 906. be reassigned to CPDPD to perform Figure 1 Spending on Suppression and Eradication of ACP and HLB Fund Source (In Millions) Estimated Proposed Program Budget 2013‑14 2014‑15 2015‑16 2016‑17 2017‑18 2018‑19 2019‑20 General Fund $1.0 — — — $9.8 $12.5 $5.0 Reimbursements 0.5 $0.4 $0.5 $0.4 — — — Food and Agriculture Fund 8.9 16.2 16.1 21.3 19.9 16.3 22.8 Federal funds 8.1 8.2 13.3 11.6 13.3 12.1 12.1 Totals $18.5 $24.8 $29.9 $33.3 $43.0 $40.9 $39.9 ACP = Asian Citrus Psyllid and HLB = Huanglongbing. 4 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET CDFA Estimates It Will Not Figure 2 Spend Entire ACP/HLB Budget Counties Affected by ACP and HLB This Year. Figure 3 summarizes revised estimated funding for Number of Counties ACP and HLB suppression and 30 eradication in 2018-19 compared ACP to the amount budgeted. As 25 illustrated in the figure, CDFA HLB estimates it will spend $7.8 million 20 less than the $48.7 million budgeted in 2018-19. CDFA has 15 not explained why current-year spending is expected to be 10 significantly lower than the budgeted level. 5 Proposal Would Help Ensure a Continuous Effort to Suppress ACP and HLB. The creation of 2012 2013 2014 2015 2016 2017 2018 a new CPDPD within CDFA— including the addition of 65 new ACP = Asian Citrus Psyllid and HLB = Huanglongbing. permanent positions—would help ensure that the state’s program to suppress and eradicate ACP and eradication efforts require coordination across HLB has sufficient dedicated resources to perform large geographic areas including residential key functions throughout the year. Specifically, neighborhoods. This is especially true where the proposed CDPDP would have a dedicated neighborhoods are located near commercial workforce to perform ongoing activities such as groves. In comparison, many other fruit trees and enforcement of quarantine areas and eradication of other types of crops (such as grapes) are not as HLB infected trees. As previously mentioned, the widely grown in residential areas. Instead they are state’s citrus program has at times been disrupted more concentrated in certain geographic areas by outbreaks of other pests. When outbreaks where climate and soil conditions are favorable and occurred, such as the one that occurred when a they are mainly grown by farmers. This typically major Mediterranean fruit fly infestation occurred allows suppression and eradication efforts to be in Los Angeles County, CDFA redirected staff away concentrated in the areas where growers operate. from ACP and HLB suppression and eradication activities in order to Figure 3 address a more immediate threat. Current‑Year Budgeted Versus Estimated Spending on In our view, having a dedicated Suppression of ACP and HLB division for these activities makes (In Millions) sense because efforts to suppress and eradicate ACP and HLB are Estimated Fund Source Budgeted Expenditures Difference distinct, in some ways, from efforts to suppress and eradicate pests General Fund $12.5 $12.5 — that infest other crops. This is Reimbursements 0.5 — -$0.5 because citrus trees are widely Food and Agriculture Fund 20.2 16.3 -3.9 Federal funds 15.5 12.1 -3.4 found in residential areas, as well Totals $48.7 $40.9 ‑$7.8 as in commercial groves. Therefore, ACP and HLB suppression and ACP = Asian Citrus Psyllid and HLB = Huanglongbing. www.lao.ca.gov 5 analysis full gutter 2019-20 BUDGET LAO Recommendations BUDGET TRANSPARENCY Approve Governor’s Proposal. We recommend Background the Legislature approve the Governor’s request for funding to suppress ACP and HLB. Given the Budget Development Process Includes recent increases in the spread of both ACP and Documents to Justify Proposals. Pursuant HLB, the growing number of trees infected with to the State Constitution, each January the HLB over the past few years, and the threat ACP Governor’s administration proposes a budget bill and HLB pose to the state’s citrus industry, we to the Legislature to serve as a starting place for believe the request for additional staff resources budget negotiations. Along with the budget bill, the and a dedicated division is reasonable. administration prepares and publishes a number Require CDFA to Report at Budget Hearings of other documents to explain and justify its on Current-Year Expenditures. We recommend budget proposals. These include BCP documents, the Legislature require CDFA to report at budget which provide detailed descriptions of proposed hearings on projected spending in the current year budget modifications for the coming fiscal year, as on ACP and HLB suppression and eradication well as justification for why new activities should activities. Specifically, the department should be funded or existing activities discontinued. If report on why it anticipates that $7.8 million of the the administration is proposing that new state funds appropriated for the program in 2018-19 are employee positions be established or funded, projected to remain unspent. This total includes the BCP usually describes the new workload, $3.9 million from the Food and Agriculture Fund the proposed position classifications, and the and $3.4 million in Federal Funds. estimated amount of staff time that would be spent Require CDFA to Report on Ongoing on each task needed to complete the workload. Efforts to Manage Spread of ACP and HLP. These documents typically also include an analysis We recommend the Legislature require CDFA of other alternatives that the administration to report at budget hearings on the status of its considered and a rationale for why the proposed efforts to address the spread of ACP and HLP, approach is preferable. The Department of Finance including whether the proposed level of resources posts these documents to its web site where they will be sufficient on an ongoing basis to address are publicly available. Legislative members and staff the threat posed by ACP and HLB to the state’s use these documents to help evaluate the merits of citrus crops. Specifically, the department should the administration’s proposals. report on (1) why the measures it is currently Governor’s Proposal implementing have been insufficient to stop the continuing geographic spread of ACP and HLB, Governor’s Budget Combines Seven (2) how the Governor’s proposal would address any Proposals Into One Consolidated BCP. For the shortfalls in the current program, (3) what targets 2019-20 budget, the administration has taken and outcomes CDFA would use to measure the the approach of consolidating multiple proposals effectiveness of its ACP/HLB suppression efforts, into a single BCP. (While this report focuses on and (4) whether there are additional measures that proposals related to CDFA, the administration the state should implement to suppress ACP and used a similar consolidated approach for other HLB. This information would help the Legislature areas of the budget as well, including the Health assess CDFA’s progress to date for suppression of and Human Services Agency, Natural Resources ACP/HLB and establish reasonable expectations for and Environmental Protection Agencies, and the suppression of ACP/HLB in the future. Department of General Services.) Specifically, CDFA’s consolidated Technical Adjustment BCP includes seven proposals totaling $3.3 million and a net reduction of 12 positions (22 new positions offset by a reduction of 34 positions). 6 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET LAO Assessment and Agriculture Fund to support scientific development of biological control efforts and Consolidated Budget Document Includes testing of alternatives for pesticides being New Proposals, Not Just Technical Adjustments. considered for deregistration in California. We find that two of the proposals contained in the In 2018-19, CDFA received $529,000 from 2019-20 Technical Adjustment BCP are technical the General Fund to support scientific in nature—specifically, the conversion of blanket development of alternatives for pesticides. positions to authorized positions and Federal This proposal would allow CDFA to sponsor Milk Market Order and Quota Implementation. additional research projects. However, we also find that five proposals would • Industrial Hemp Program Positions. fund new activities and expand existing activities. Proposes six new positions for the In our view, these types of proposals should not development, enforcement, and administration be considered “technical,” but rather represent of the Industrial Hemp Program. fresh initiatives meriting a dedicated analysis. Chapter 398 of 2013 (SB 566, Leno), known Such proposals include (1) newly authorized and as the California Industrial Hemp Farming funded positions; (2) funding for new activities; Act, requires CDFA to establish registration and/or (3) extensions of funding, activities, and/ and renewal fees to be paid by growers of or positions that the Legislature previously had industrial hemp for commercial purposes. authorized only on a limited-term basis. Specifically, This proposal would allow CDFA to establish the CDFA consolidated BCP includes the following the Industrial Hemp Program. We note that nontechnical proposals: the federal Agricultural Improvement Act of • Mountain Pass Border Protection Station 2018 (commonly referred to as the farm bill) (BPS). Proposes $724,000 from the General legalized industrial hemp and allows states to Fund and eight new positions to operate regulate the production of industrial hemp. additional lanes at the new BPS in Mountain • Organic Waste Management. Proposes Pass. The Mountain Pass BPS was approved $140,000 from the General Fund and one new by the Legislature in the 1990s and completed position from 2019-20 through 2025-26 to in August 2018. It replaced the Yermo BPS implement Chapter 633 of 2018 (AB 1981, on Interstate 15 which was designed to Limon). This bill requires the California accommodate traffic volume of about one Environmental Protection Agency to work million vehicles annually. By 2017, traffic with certain departments, including CDFA, volume had increased to more than eight to develop and implement policies to divert million vehicles annually. This request is to organic waste from landfills by promoting the staff the newer, larger BPS. use of agricultural and other organic waste • Office of IT Services Infrastructure. as feedstock for compost that can be used Proposes $930,000 (including $475,000 from to improve the state’s soils. CDFA anticipates the General Fund) in 2019-20 and $142,000 that it will be engaged in research and ($72,000 General Fund) annually thereafter technical work to inform the development of and one new permanent position for the new policies to promote the production and replacement of IT equipment and to improve application of compost. CDFA’s network security. In 2016, CDFA Lack of Typical Justification Inhibits underwent a security audit by the California Legislature’s Ability to Evaluate Proposals. Military Department on behalf of the California As noted above, typically these types of new Department of Technology. This request is to proposals would be presented in standalone address issues raised by the audit as needing BCPs with detailed descriptions of program remediation. activities to be undertaken and explanations • Development of Pesticide Alternatives. for why the administration believes the level of Proposes $671,000 ongoing from the Food www.lao.ca.gov 7 analysis full gutter 2019-20 BUDGET funding and positions requested are needed. The Lack of BCPs Also Increases Difficulty of Legislature uses this information to determine Holding Administration Accountable. The whether the Governor’s proposals are worthy of absence of public documentation for exactly adoption, modification, or rejection. In addition, how the administration proposes to expend information provided in BCPs also can be the funding will also make it difficult in future years basis for the Legislature to conduct oversight of for stakeholders and the Legislature to hold department programs to ensure that currently departments accountable for meeting these funded activities are performing effectively before expectations. Assuming the Legislature approves providing additional resources. For example, BCPs the BCP as proposed, this public record of would typically allow the Legislature to answer the intended spending facilitates the Legislature’s ability following types of questions: to monitor whether such commitments ultimately are completed by providing something for the • Mountain Pass Border Protection. What Legislature to compare against actual expenditures workload would the eight new positions to identify instances where funds may have been perform? What are the staffing standards spent for unauthorized purposes. Absent this for BPSs and what are the standards based documentation, legislators, staff, and stakeholders upon? How does the proposed staffing level may struggle in future years to understand what at the Mountain Pass BPS compare to staffing expectations were set when the budget was levels at other comparable stations? How approved. would the increase in staffing reduce traffic Administration Has Been Forthcoming with congestion at the BPS? Additional Detail Upon Request. To its credit, • Office of IT Services Infrastructure. What when we raised concerns about the lack of detail workload would the new position perform? provided with budget documents and requested How will the proposed resources be used to additional information, CDFA has been very improve IT security? responsive. Specifically, CDFA has been able to • Development of Pesticide Alternatives. provide us with descriptions of and justifications for What is the basis for the proposed level their budget proposals in response to our individual of funding? How were research projects requests. Based on those justifications, we find prioritized and selected? How much of the the proposals contained in these consolidated original augmentation has been awarded to BCPs reasonable. Such information, however, date? has not been made publicly available (as BCP • Industrial Hemp Program Positions. How documents are), and therefore still is not broadly would the six positions requested by CDFA be accessible to legislative members, legislative staff, funded? What workload would be performed or stakeholders. This makes it difficult for the public by the new positions? to understand and evaluate the Governor’s budget • Organic Waste Management. What workload proposals now, or in future years, to hold the would the new position perform? How will administration accountable for meeting intended the state’s progress towards developing expenditure plans. the organic waste processing and recycling LAO Recommendation infrastructure necessary to meet the state goals specified in legislation be measured? Require Administration Provide Sufficient Justification Prior to Approving New Budget Absent the information to answer these types of Proposals for 2019-20. The Legislature must feel questions, the Legislature is left with little basis for comfortable that the proposals contained in the determining whether the proposals are reasonable consolidated BCP are justified before approving or appropriate. This impedes the Legislature’s them. Our office has requested certain information ability to exercise its oversight role over how state from the administration and will share it with funds are used, or to ensure that funds are spent legislative staff and others who may request it effectively and for well-justified purposes. 8 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET from us, but there might be individual issues for agricultural entities. (The State Water Resources which members require additional information. Control Board would be responsible for collecting To that end, we recommend legislative staff and a fee on water system customers and for members request additional information about any administering the financial assistance program.) of the proposals for which they believe additional Specifically, CDFA would administer the following detail and rationale is needed. This should not be new charges: difficult or time-consuming for the administration, • Fertilizer Mill Fee. The administration as presumably CDFA had to prepare similar proposes a mill fee of six “mills” (equal to justification for the Department of Finance before its six-tenths of a cent) per dollar on the sale of requests were included in the Governor’s budget. fertilizer. CDFA estimates this charge would Direct Administration to Provide BCPs generate $14 million to $17 million per year When Proposing New or Extended Positions when fully implemented. and Activities in the Future. We recommend the • Charges on Milk Producers. The Legislature direct the administration to revert to administration proposes to impose charges the long-standing practice of providing standalone on milk producers beginning January 2022. BCPs specifically for proposals that include CDFA estimates this charge would generate (1) new positions; (2) funding for new activities; $5 million per year when fully implemented. and/or (3) extensions of funding, activities, and/ • Charge on Confined Animal Facilities. The or positions that the Legislature previously had administration proposes to impose a charge authorized only on a limited-term basis. This on confined animal facilities. At the time this will better enable the Legislature to exercise its analysis was prepared, CDFA did not have an oversight role over how state funds are used and estimate of how much revenue this charge ensure that funds are spent effectively and for would generate when fully implemented. well-justified purposes. The consolidated BCP approach makes sense for proposals that are In our analysis of the administration’s Safe truly technical in nature, such as reversions and and Affordable Drinking Water proposal—which reappropriations for similar purposes. appears in The 2019-20 Budget: Resources and Environmental Protection—we identify the SAFE AND AFFORDABLE following issues for the Legislature to consider as DRINKING WATER it deliberates on the proposal: (1) its consistency with the state’s existing human right to water policy, The administration proposes budget trailer (2) uncertainty about the estimated revenues that legislation to implement a significant new would be generated and the amount of funding policy that would implement a new financial needed to address the problem, (3) a comparison assistance program to address unsafe drinking of the beneficiaries of the program with those who water, particularly in small and disadvantaged would pay the new charges, (4) the limited nature of communities. CDFA requests one-time funding alternative fund sources for the proposed program, of $1.4 million General Fund and seven positions and (5) trade-offs associated with the proposal’s to administer the collection of the charges on safe harbor provisions. www.lao.ca.gov 9 analysis full gutter 2019-20 BUDGET LAO PUBLICATIONS This report was prepared by Shawn Martin and reviewed by Brian Brown. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814. 10 LEGISLATIVE ANALYST’S OFFICE