Agriculture tax relief among many rural priorities for Legislature
ST. PAUL — Rural Minnesotans’ ears will be burning when state legislators return to the Capitol Feb. 25 for their 2014 session.
Thissen’s list ranges from removing a tax on farm implement repair that costs Minnesota farmers $2 million a month to providing more greater Minnesota economic development assistance. The speaker, in a Forum News Service interview, could not say how much the Democratic initiatives would cost, other than most would be “in the millions, not tens of millions of dollars.”
The two most expensive proposals are eliminating the implement repair tax and increasing the ag property tax credit.
Rep. Paul Marquart, D-Dilworth, said the ag property tax issue he is leading may not help some small farmers, but most would get property tax reductions of up to $575.
The reduction would begin this year on taxes already partially paid, he said, and only apply to homestead farmland. That generally is farmland where the farmer or a relative lives.
Actions legislators and Gov. Mark Dayton took last year lowered property taxes for many Minnesotans, but not for farmers.
“Not everyone has seen that relief,” Marquart said of the 2013 tax actions. “In fact, farmers have seen big property tax increases.”
More services funded by property taxes, such as fire and law enforcement, are not more in demand just because today’s land prices are higher, he said.
“Land value does a farmer no good until he sells it,” Rep. Paul Anderson, R-Starbuck, said. “It is still the same productivity. The increasing value doesn’t give me a better operation in terms of what I produce.”
If a farmer pays $15 an acre in taxes, the $2 to $3 tax break Marquart proposes is significant, said Anderson, a farmer.
Every little bit helps, he added.
Early estimates indicate that the added farmland credit would cost the state $33 million this year.
Ending the farm equipment repair tax implemented last year would be another step to help farmers, rural lawmakers said.
“I am not so sure our metro colleagues understand how big those repair bills get,” Anderson said, adding that he has seen bills of up to $30,000 to fix self-propelled farm implements.
Thissen said he is sure the Legislature will vote to overturn the tax.
Thissen said some counties were left out when the state increased County Program Aid $40 million last year.
Nearly a dozen low-population counties with lot of farms lost state money in the deal. That should be fixed, he said.
Marquart said the cost to provide money they lost should come to less than $1 million.
“The new money (approved last year) is weighted more heavily toward the metro area,” Anderson said. “That is a path I don’t like to see us going down.”
Economic development aid also is in the legislative agenda.
“We still have not seen all the economic developments they saw in the metro area,” Marquart said.
Thissen suggested that lawmakers take action to improve fast Internet access, known as broadband, in rural areas. He said grants to fund Internet infrastructure construction could be considered and local governments may be given an easier route to borrow money for internet expansion.
The speaker also proposes several low-cost programs to provide aid for small businesses, mostly in greater Minnesota.
One would add money to a loan fund for businesses. Another would provide “innovation vouchers,” basically state subsidies to help manufacturers pay for private or college consultants that can provide specific expertise the business may not have.
Thissen said he wants state officials to find more funding for training workers. In many rural areas, jobs go unfilled because they cannot fine enough workers, such as welders, within commuting distance.
A long-term solution to high propane prices caused by an Upper Midwest shortage also is on the agenda, but Thissen said he does not have a specific plan.
Anderson, however, is working on a bill to eliminate sales tax for two years on propane tanks. The bill is his answer to the need to increase propane storage in Minnesota, so the fuel may be bought in the summer, when prices are low, and used during cold winter weather.
Thissen said long-term care funding will be discussed, but could not give specifics about what nursing homes and other elderly care organizations can expect. Officials in rural areas say nursing home pay is so low that they have to turn away residents for lack of staff.
Thissen said that it is important for even Twin Cities’ legislators to support greater Minnesota issues. At some point, he said, there will be too many rural Minnesotans moving to the Twin Cities, when it would benefit everyone for them to remain home.