The Maxwell Public Utility District in Colusa County, California, just northwest of Sacramento, got a $1.28 million loan and a $74,700 grant from the federal government for a water well replacement project in 2015.
Last year, President Donald Trump won the county by 13 percentage points.
Next year, the money that funded the well could completely dry up.
Rural communities across California, many of which voted for Trump, stand to lose millions of dollars in federal funding if proposed cuts in Trump’s budget proposal, unveiled in detail last week, are enacted. While the prospect of the cuts becoming law is dim, it still poses a threat that state lawmakers are readying to fight hard.
Business and industry loan guarantees, funding for water and waste disposal and direct loans for single-family housing are just some of the programs that would be eliminated under the draft budget for the Department of Agriculture’s Rural Development program. In the 2016 fiscal year, it accounted for more than $800 million in federal dollars flowing to California.
“The cuts in this budget proposal to the USDA and our rural development programs would do great harm to those of us living in rural America,” Jim Costa, co-chair of the centrist Blue Dog Coalition, said in a statement. “We should be increasing investments in these communities to create conditions for improved economic growth, not cutting the very investments needed to help our communities recover.”
In a statement, Jennifer Cressy, spokesperson for Rep. Tom McClintock, R-Calif., said the congressman, “ is working with the administration to protect rural areas that have been devastated by federal land use restrictions and cost-prohibitive environmental regulations and are (sic) confident the result will be a renaissance in our mountain communities.”
USDA Rural Development provides support to rural areas in the form of loans and grants for development projects. As of last fall, it was managing nearly $216 billion in direct and guaranteed loans. The president’s budget reduces spending by 26 percent, according to analysis by the National Sustainable Agriculture Coalition, a D.C.-based nonprofit agency that represents agricultural groups around the country.
On Tuesday, a group of 28 Democratic senators sent a letter to Trump to raise concerns over proposed cuts.
“If enacted, these cuts would have a damaging impact on rural communities throughout the country,” the Senators wrote in the letter.
The White House did not immediately respond to request for comment.
One of the programs USDA Rural Development funds in California is value-added producer grants, money that helps farmers test and develop new business ideas. Top O’ The Morn Farms, a dairy based in Tulare, California, received a grant in 2016 to study and then launch a home delivery service for their milk. Trump won Tulare County by more than 10 points.
Nearly $2 million in grants were awarded in California in 2016. The proposed 2018 budget would do away with new grants completely.
“They're trying to eliminate government programs that basically help small business” Dave Runsten, policy director for the Community Alliance with Family Farmers, a non-profit organization in Davis, California, said.
Runsten said the grants were effective in helping farmers expand their businesses. He said the private sector, “just doesn’t deal with the small people.”
“It’s all a question of the numbers and it’s just not worth it for them to deal with small enterprises,” he said.
Daren Bakst, research fellow in agricultural policy at the Heritage Foundation, a conservative research group, disagreed. He said investments of this type reduce private investment and distort the market.
“If something is worthy of investment, private capital will find its way to it,” he said.
Bakst said that Trump’s budget eliminates many duplicative programs and that rural communities would ultimately benefit from a leaner federal government.
“What I think it’s going to do, is it’s going to help taxpayers and it’s going to help rural communities that have taxpayers,” he said.
The proposed budget also eliminates loans and grants for farm labor housing, a program that benefits California. In July, 2016, the USDA awarded $26 million for farm worker housing and $18 million went to California, including $3 million for a project in Bakersfield, home to House Majority Leader Kevin McCarthy.
A spokesperson for McCarthy did not immediately respond to request for comment.
In 2014, the USDA awarded $20.7 million in loans, including $12 million to California.
Together, these awards helped build more than 500 affordable housing units for farm workers.
“It looks like a cut, but really it's a tax on rural communities,” Wes King, policy specialist with the National Sustainable Agriculture Coalition said.
King said federal money is crucial because investment in rural areas is “low profit and high risk” and therefore unattractive to the private financial market. He said local governments may have to raise taxes to make up the shortfall. King said projects that are already underway will most likely be unaffected, but the uncertainty caused by the budget could hamper development. He also said that the cuts could affect the USDA’s goal of promoting trade.
“Agriculture doesn’t exist in a vacuum,” he said, “it exists as part of these communities.”
Contact: Anshu Siripurapu at 202-383-6040