Legislative update: Rural issues remain top of mind

2017 Legislative Update

Significant farm and rural issues are receiving considerable attention at the State Capitol and earlier committee deadlines this year are contributing to a faster pace of bill introductions and committee discussions. Here’s a quick update on some of the key issues of interest to corn farmers.

Water Quality

On Friday, Feb. 3, at the Minnesota Environmental Congress, Gov. Dayton announced that he wanted a “25 by 25” plan concerning Minnesota’s water resources – a 25-percent improvement in water quality by the year 2025. Rather than proposing a specific legislative agenda, like the buffer law of 2015, the governor stated he wants more of a “bottom-up” approach, enlisting people in a more voluntary mission to improve the state’s water quality. Of course, some state agencies are now taking steps to establish tighter rules concerning water quality, based on previously passed legislation, but they too are requesting input in the process.

Variable Rate

Variable rate side dressing.

The Star Tribune noted Dayton’s different approach to his 25 by 25 goal as did Harold Wolle, president of the Minnesota Corn Growers Association, who said MCGA members appreciate the new approach and will support the 25/25 goal. Wolle said that the goal will be achieved through improved technologies: “It’s going to be precision application of our farm nutrients that will allow us to make the next big achievement in reducing pollutants in our water supply.”

The MCGA also noted that corn farmers are leaders in adopting new approaches and that the state needs to take a “macro approach” in addressing all impacts to water quality – from homeowners to industry and even from governmental units.

Taxes

The Minnesota Tax Foundation last month posted its Guide to Taxes and the Economy and it has been drawing a lot of attention from legislators and advocates for lower taxes ever since. One of the issues that contributes to the state’s overly cumbersome property tax system, which includes a nation-leading 52 different property classifications, concerns levies for new school construction in some parts of Greater Minnesota.

It’s a big problem for farmers because farmland frequently accounts for the majority of the tax base for rural school construction projects but farm families make up only a small portion of the taxpayers and students. When rural school construction levies are passed, farmers must pay a disproportionate share of the tax burden for the life of a 20- or 30-year construction bond. Considering the significant costs that can fall on farmers, anyone can understand why Greater Minnesota voters turned down close to $600 million in proposed school construction bond referendums last year.

Relief from this tax burden was included as a provision in last year’s tax bill, but was ultimately vetoed for other reasons by Gov. Dayton. This year, the governor and Lt. Gov. Tina Smith are both champions for the same tax break, and the Star Tribune noted that Smith advocated for it during recent rural gatherings with farmers. Thankfully, there appears to be bipartisan support among legislators to fix this property tax disparity related to school bond referendums and we’re hopeful that several tax cut provisions, including this one, will be incorporated into a larger omnibus tax bill to be considered later during this legislative session.

Renewable Fuel Standard

While on the campaign trail, then candidate Donald Trump was consistently pro-ethanol. As President, some of Trump’s cabinet nominees, however, have elevated concern among those in the corn and renewable fuel industry. As an example, the new head of the EPA, Scott Pruitt made unfavorable statements concerning ethanol while he served as Attorney General of Oklahoma. More recently, as the head of EPA, he vowed his commitment to follow the law and the President’s support for ethanol. Trump’s selection to head the Department of Energy, Rick Perry, supported ethanol mandate waivers while serving as governor of Texas. As Trump’s nominee to head the Department of Agriculture, former Georgia Governor Sonny Perdue has not discussed the RFS to any degree.

Among the first concrete actions taken by President Trump was a freeze on new regulations, issued in late January, to be held in place until the administration had the opportunity to review the new rules scheduled to take effect. Renewable Volume Obligations (RVOs) were among the new regulations scheduled to take effect. Incoming administrations frequently issue such freezes so it should not be considered a harbinger for the RFS. It is a reminder, however, that farmers need to continually inform policymakers and urge support for policies that are important.

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