HSP Funding Drops by $40 Million Due to Unexpected Budget Errors

Brian GermanAgri-Business, Funding

California’s flagship climate program, the Healthy Soils Program (HSP) is facing a significant funding setback after errors were found in the state’s budget by the Department of Finance. The California Department of Food and Agriculture (CDFA) will now have $40 million less than anticipated for HSP funding. CDFA Secretary Karen Ross recently issued an apology to stakeholders for the accounting mistake.

HSP Funding

Secretary Ross explained that the errors discovered during the budget evaluation process led to a misallocation of funds intended for the HSP in the 2022-23 budget. The corrected amount aligns with the Legislature and Administration’s budget agreement but was inaccurately reflected in the language of the 2023 Budget Act. Despite already committing funds to HSP Block Grants Pilot and HSP Demonstration Projects, CDFA now faces the challenge of absorbing the unanticipated reduction.

HSP funding for direct-to-producer grants will now be approximately $11 million. Initially, applications for direct-to-producer grants were going to be accepted sometime in the fall. However, budget change has delated Climate Smart Agriculture Technical Assistance grants that are integral for HSP solicitation. As a result, solicitation is now expected to begin sometime in January.

California’s budget situation is precarious, as the extended tax filing deadline has condensed the timeline for budget projection. Early expectations were for the state to collect $42 billion by October. However, according to the Department of Finance, that number is closer to $18 billion. Final revenue numbers are expected sometime in the coming weeks.

“We are hopeful that preliminary revenue trends this year will improve, but we must all be prepared to work together in a vastly changed budget scenario,” Ross noted in her letter to partners. “We appreciate all your support in building the very successful Healthy Soils Program and remain optimistic that while this slows us down, we will still move confidently forward toward our climate goals.”

Brian German
Ag News Director / AgNet West