Citing congressional discretionary spending cuts of 12% or roughly $3 billion since FY2010, and anticipating deeper cuts in FY2013, along with a White House order to consolidate and streamline services, Secretary of Agriculture Tom Vilsack this week announced USDA will close 259 offices in the U.S. and globally to save an estimated $150 million a year in administrative costs, including rent, travel and supply purchase reductions. Vilsack, after notifying congressional leaders, made the announcement during a speech Monday at the American Farm Bureau Federation (AFBF) annual meeting in Honolulu, Hawaii, while various USDA subcabinet officers in Washington, DC, held briefings to assure stakeholders no program or service cuts will result from the facility closings since the cuts affect only USDA's administrative budget, not program budgets.  

The facilities slated for closing are as follows:

• Farm Service Agency (FSA) - 131 county offices in 32 states;                                         
• Food Safety & Inspection Service (FSIS) - Five district offices in five states;                  
• Foreign Agriculture Service (FAS) - Two country offices;                                          
• Animal & Plant Health Inspection Service (APHIS) - 15 offices in 11 states and five offices overseas;    
• Rural Development - 43 area and sub offices in 17 states and territories;                          
• Natural Resources & Conservation Service (NRCS) - 24 soil survey offices in 21 states;  
• Agricultural Research Service (ARS) - 12 programs in 10 locations, and                           
• Food, Nutrition & Consumer Services (FNCS) - 31 field offices in 28 states.

When it comes to closing FSA offices, Vilsack faces legal restrictions in the 2008 Farm Bill, inserted shortly after then-Secretary of Agriculture Mike Johanns announced he wanted to close 600 FSA offices. USDA must now hold public hearings within 30 days if it intends to close or consolidate offices with two or fewer employees. Vilsack said those hearings are being scheduled and he'll take another 90 days to review the comments. Dubbing the effort a "Blueprint for Stronger Service," Vilsack anticipates few employee layoffs as 7,000 USDA workers have taken early retirement or separation packages over the last 15 months, and as many as 2,000 more are expected to accept the same offers by the end of 2012.

"Our workload is at a record high, we have less money and fewer people, and work to do and we tried to address how do you do that without interrupting service," Vilsack said to reporters. "Not all of these (vacated) positions will be filled, and employees will be given options to move to other offices within 20 miles of closed facilities," he said. In addition, Vilsack said the department is consolidating more than 700 cell phone plans into 10; standardizing civil rights training and purchases of cybersecurity products, and streamlining and centralizing USDA employee services.

Detailed fact sheets on the Blueprint for Stronger Service can be found here, by USDA Mission Area: Farm and Foreign Agricultural Services (FFAS);Food, Nutrition, and Consumer Services (FNCS); Food Safety;  Marketing and Regulatory Programs (MRP); Natural Resources and the Environment (NRE); Research, Education and Economics (REE); and  Rural Development.  

For more, please visit  www.usda.gov/strongerservice.  

Secretary Tom Vilsack on USDA's Blueprint for Stronger Service

The Assembly Water Parks and Wildlife Committee this week considered two important two-year bills - AB 157 (Jeffries) and AB 550 (Huber). Both bills had been held over in Committee from last year.

AB 157 proposes a 25% across-the-board reduction in all categories of the current water bond. After a lively debate, AB 157 was defeated on a vote of 1 Aye and 10 No votes. However, many committee members expressed an interest in keeping the discussion alive regarding revisions to the current water bond in order to make it more palatable to the public when it votes in November.   Assemblyman Huffman expressed a view that the water bond should have remained on the November 2010 ballot which he believes would have led to its defeat.

AB 550 prohibits construction of a peripheral canal unless (1) there is an independent cost analysis performed by the Legislative Analyst Office and (2) a vote of the legislature based upon such cost analysis. After extensive testimony, the bill was defeated on a vote of 5 Aye votes and 6 No votes - the bill needed 7 affirmative votes to pass the 13 member committee. The bill was opposed by Metropolitan Water Districts (MWD), Association of California Water Agencies (ACWA), numerous water agencies, labor unions, many agricultural groups and the LA Board of Supervisors.

It is fully anticipated that the topic of both bills will be the subject of intense debate over the next several months as decisions are made regarding the water bond on the November 2012 ballot. Also, there are likely to be introduced bills on these topics before the February 24 bill introduction deadline date.

The Legislative Analyst which is a non partisan advisor to the Legislature said that the Governors budget underestimates revenues by $3.9 billion. About $3.7 billion of the difference is in estimates of state income tax collections, primarily taxes on capital gains.

The Democratic governor says California taxpayers will reap $65 billion in capital gains in the 2012 tax year. The analyst says $62 billion. That's roughly $3 billion of the $3.9 billion difference in expected tax revenue. "Our revenue estimates - including estimates of state revenue gains from the governor's proposed initiative - currently are lower than the administration's," the analyst writes.

"Already California's budget is dependent on volatile income tax payments by the state's wealthiest individuals and the governor proposes that these Californians pay more for the next few years. As has become evident in recent years, differing fortunes for these upper-income taxpayers can create or eliminate billions of dollars of projected state revenues." The top 1 percent of filers pay roughly 40 percent of state income taxes.

More ominously, the analyst says, "If our current revenue estimates are closer to the target than the administration's, the Legislature will have to pursue billions of dollars more in budget-balancing solutions." Making the state's cash-starved general fund solvent can be done in one of three ways: Raising the amount of revenue it receives, reducing the cost of services it provides or a combination of the two.

The analyst notes that its forecasting method differs from the Brown administration making comparison difficult. But even when comparing apples to apples, the Brown administration is still far more optimistic. For example, the Democratic governor predicts federal tax cut rates from 2001 will expire at the end of 2012, as scheduled. The analyst doesn't. Brown says the expiration will drive taxpayers to cash out capital gains in 2012 under the more favorable rates than wait until 2013.

So the analyst removed the tax shift effect from its assumptions. Even without it, Brown estimates $20 billion more in capital gains than the analyst each year for two years. "Over time, (the Department of Finance) assumes capital gains begin to approach levels only experienced during previous stock market and real estate 'bubbles.' We advise the Legislature to regard these estimates with some caution."

The analyst also reiterates his view that the Democratic governor's plan to increase state income taxes on upper income Californians for five years and boost the sales tax by .5 percent will generate $2.1 billion less than the nearly $7 billion Brown estimates.

USDA's Agricultural Air Quality Task Force (AAQTF) will hold a public meeting Feb. 7-8 in Tempe, Arizona, "to continue discussions on critical air quality issues related to agriculture," with specific emphasis on obtaining "a greater understanding of the relationship between agricultural production and air quality." The committee will reserve time for public comment, the department said.

April 30, 2012, is the deadline for new workplace union election procedures under a final rule issued by the National Labor Relations Board (NLRB). The NLRB rulemaking, strongly opposed by business and industry, received 66,000 comments after it was published in June, 2011, and the final rule focuses on procedures in cases where employers and unions cannot agree, including whether employees covered by a union election petition are an "appropriate voting group." If a dispute arises, the matter will go to a regional NLRB office where a director will make a decision on it and if an election will be held. The hearings that ensue from such disputes will be limited to questions of whether the election should be held, with pre-election eligibility and appeals postponed until after the election as a mechanism for speeding up the election process. The NLRB hearing officer will have broad authority, including NLRB discretion whether to even allow appeals.