Legislative Update – May 17, 2022
It’s crunch time at the state legislature with the constitutionally-defined deadline for legislative work looming on Monday, May 23—now less than a week away. In these final days, MFU is working hard to make sure our members’ priorities are retained as budget deals are struck for agriculture, taxes, and other jurisdictions. In all our conversations, we’ve stressed the importance of leveraging the opportunity presented by the state’s historic budget surplus to make life better for family farmers and other working Minnesotans.
On Monday, May 16, we received welcome news: leaders in St. Paul reached a global budget deal necessary to strike compromises on major spending items and define budget targets for smaller budget items, like agriculture. The short, one-page document signed by Senate Majority Leader Jeremy Miller (R-Winona), Speaker Melissa Hortman (DFL-Brooklyn Park), and Governor Tim Walz agreed to:
- $4 billion for taxes
- $1 billion for education
- $1 billion for health care
- $450 million for public safety and judiciary
- $1.3 billion for other spending areas (including agriculture, drought relief, etc.)
- $1.5 billion bonding bill for capital construction projects
Broadly, the deal would spend $4 billion on tax relief, $4 billion on other spending, and carry forward an approximately $4 billion surplus into the next biennium. For reference, a $4 billion tax bill is larger than the house’s $1.6 billion tax bill and smaller than the Senate’s nearly $9 billion proposal. Work remains to define spending targets for individual committees – and to hash out the details of the tax bill – but defining this broad framework is a critical first step toward a final deal.
In the tax bill, MFU has a number of priorities reflected in both the House and Senate packages. All still in play, we’ve been working to build support among conferees for:
- Expanding the Beginning Farmer Tax Credit (BFTC) by expanding the for sale of agricultural assets to family members and providing the Rural Finance Authority (RFA) funding to administer the credit, improving outreach to emerging farmers, create an online application, and otherwise better administer the credit.
- Expanding the Ag to School Tax Credit to 85 percent provide property tax relief to farmers while also helping rural school districts make needed improvements to their facilities—a win-win for farmers and their communities.
- Increasing ag homestead limit to keep pace with increases in land prices and help family farmers manage increasing land prices and retain family farm operations.
- Repealing the sales tax on fencing equipment and making the change retroactive through last summer will provide many livestock producers with needed relief and allow others to reinvest in their operations in response to last summer’s historic drought.
- Funding SWCDs through a new local government aid program will provide them with the stable, long-term funding they need to best assist our family farmer members in meeting their on-farm conservation goals.
- Establishing a buffer tax credit that would help compensate farmers for acres taken out of production to be held in riparian buffers.
In the agriculture committee, conferees met throughout last week to discuss provisions that are well-aligned in both packages. For MFU’s part, we’re glad to see that both Chair Torrey Westrom (R-Elbow Lake) and Chair Mike Sundin (DFL-Esko) prioritized expanding meat processing, investing in voluntary soil health practices, ag emergency preparedness, cooperative development, and supporting beginning and emerging farmers.
Finally, we continue to push the legislature to approve a long-delayed drought relief package for specialty crop and livestock producers who can demonstrate need related to last summer’s historic drought. While the drought is over—and in an ultimate irony much of the state has access moisture—we’re continuing to hear from farmers for home the relief would be meaningful. Many still haven’t gotten back out on their pasture and others have unpaid bills related to the drought.
On the administrative side, Governor Walz has been quick to act on hours of service exemptions in an effort to aid with spring planting and storm related damage. On May 13, he approved relief from regulations on motor vehicle carriers transporting fertilizer, pesticides, and seed. And on May 16, he authored another for those transporting livestock following widespread storm damage across the state.