Legislative update: Negotiations over budget agreement continue
By Amanda Bilek
Senior Public Policy Director, Minnesota Corn Growers Association
At the time of publication there is less than a week until the constitutional adjournment date for the Minnesota State Legislature, but we are still waiting on a budget agreement among Governor Walz and legislative caucus leaders. Without an agreement, the conference committees that have been meeting to resolve differences between the House and Senate cannot complete their work. Each hour that passes without the agreement, the likelihood of a special session grows. Eventually there is just not enough time to finish details and process bills. The Legislature has needed a special session in every budget year with divided government since 2015.
As we head into the final days here are some key items that the MCGA policy team is tracking and working on. Without a budget agreement, we don’t have a sense yet of what might make into final bills.
The House and Senate taxes committees have released their bills and await floor action. The House will take up their version of the tax bill on Tuesday. Unfortunately neither body included the buffer property tax credit. This was due to several factors including the need to raise revenue, rather than reduce revenue such as the County Riparian Aid for buffer compliance that is automatically distributed to counties at $8 million per year despite near universal compliance by farmers with the buffer law.
However, the Senate tax bill does include several positive provisions for agriculture. The Senate tax bill proposes to expand Minnesota’s Sustainable Aviation Fuel (SAF) tax credit by an additional $10 million the next two years and then allocates $2 million per year starting in 2028 through 2035. The SAF market represents a new value-added opportunity for agriculture at a time when low commodity prices and high input prices are squeezing farm families financially.
The Senate tax bill also eliminates a $4 million statutory cap for the Beginning Farmer Tax Credit helping to ensure that every eligible beginning farmer who applies for the credit should be able to receive the credit. Additional changes to the Beginning Farmer Tax Credit will also allow LLCs owned by two or less people who are spouses or family members to take advantage of the credit. A $5 per acre credit for farmers that are certified through MDA’s Ag Water Quality Certification program is also included. Given the evenly divided House, the House version of the tax bill is more neutral and does not contain many adjustments.
The agriculture conference committee did a walk-through of the various provisions included in the House and Senate bills. MCGA submitted a letter to the committee voicing our support for specific provisions. Going into conference committee the House had $17 million in new spending and the Senate had a slight spending reduction of $300,000. There are also policy provisions in the Senate bill to be resolved with the House, but conferences can’t do much else without a final budget target.
The environment conference committee also did a walk through. The House bill is what is considered a “lights-on-bill” which is a basic budget bill that allows the agency to continue operating at their current operational capacity. Neither the House nor Senate contain any policy. The Senate bill originally included several permitting reform provisions that we supported as well as a public waters inventory piece. There were several policy provisions that were in the Senate bill that were deemed controversial by the DFL caucus and to get the bill off the Senate floor all policy provisions were removed prior to the floor vote and put into a separate policy only bill that is currently sitting on the floor. It is unclear if they will have any negotiations or will have a vote on an environment policy bill this year.
