Legislative Update – May 24, 2022
At midnight on Sunday, May 22, the legislature hit their constitutional deadline without reaching major deals on tax relief, education, healthcare spending, and public safety. That said, a bright spot of bipartisan work and agreement was a budget for long-awaited drought relief, agriculture, and broadband, which passed with a nearly unanimous vote in the Senate that evening.
With deals seemingly close-at-hand, Governor Tim Walz (DFL) and Speaker Melissa Hortman (DFL-Brooklyn Park) were quick to call on legislators to continue their work on deals with the goal of reconvening for a short special session. These shorter sessions—which are called by the Governor but adjourned by the legislature—have become common practice in recent years.
“You don’t get the ball to the 1-yard line and go home,” said Governor Walz during a media availability Sunday night. “You finish the job Minnesotans expect us to do.”
Senate Majority Leader Jeremy Miller (R-Winona) was less optimistic and described being farther apart on important items. That said, at least as of Sunday night, he wouldn’t rule out the possibility of a special session.
“Never say never,” he shared with reporters late Sunday.
The week prior, legislative leaders and the Governor agreed to a global budget deal that split the historic budget roughly into thirds: approximately $4 billion for taxes, new spending, and ongoing reserves, respectively. You can see the one-page deal here.
Guided by this framework and a more detailed budget agreement struck later that week, lawmakers worked long hours through the weekend and late into Sunday night. A notable step forward was a deal on a tax package that—according to Chairs Carla Nelson (R-Rochester) and Paul Marquart (DFL-Dilworth)—would have delivered the largest tax cut in state history.
Important for MFU, the final tax deal would have:
- Expanded the Beginning Farmer Tax Credit (BFTC) to family members
- Increased the Ag to School Tax Credit to 85 percent
- Increasing ag homestead limit to reflect increasing land values
- And supported Soil and Water Conservation Districts (SWCDs) through a new local government aid program
The agriculture, drought, and broadband bill, which passed on a party-line vote in the House and one vote shy of unanimously in the Senate reflected many of MFU’s top priorities going into the session.
First, the bill included $18.4 million for the long-awaited drought relief. This is the same that MFU first asked for in August and that Governor Walz proposed last October. The package for drought and emergency response includes:
- $8.1 million in ‘Rapid Response Grants’ for livestock and specialty crop producers
- $2.5 million for the Rural Finance Authority’s (RFA) disaster loan revolving loan account
- $1 million for the Veterinary Diagnostic Lab (VDL)
- $1.5 million for High Path Avian Influenza (HPAI) response
- And $5 million for tree planting and $300,000 for well remediation at the Department of Natural Resources (DNR)
Unfortunate for some members, we were unsuccessful in broadening eligibility for Rapid Response Grants to all counties. Producers in four counties that are not contiguous with federal disaster counties—Winona, Wabasha, Goodhue, and Rice—will not be eligible for grants according to our analysis of the eligibility language.
In the coming weeks, the Minnesota Department of Agriculture (MDA) will be working swiftly to establish a grant program and get money out to producers. What we do know is that livestock and specialty crop will need to provide an “inventory of expenses” resulting from the drought to be eligible for an up-to $7,500 reimbursement. You can read the text of the bill here (line 46.1).
We’ll keep members updated in the coming weeks as we learn more from the MDA. That said, it’s safe to say that farmers who plan to apply for a drought relief grant should begin compiling receipts and other documentation related to expenses incurred last growing season.
In the agriculture bill, there are important wins for MFU despite the bill being much smaller than was originally proposed by Governor Walz and advanced by Chair Mike Sundin (DFL-Esko) and House DFLers. The House’s proposal would have spent around $60 million on agriculture in 2023, while the final deal appropriates around $7.5 million.
Across this and future years, the final deal struck between Chairs Torrey Westrom (R-Elbow Lake) and Sundin includes a number of priorities MFU worked hard to secure. These include:
- $1.5 million for meat processing, including over $1 million for processors and $350,000 for K12 meat processing grants;
- $2 million for ag emergency response;
- $500,000 for new voluntary soil health grants;
- Reauthorizing Cooperative Development grants;
- $3.08 million for new and emerging farmers, including:
- $2 million for a new down payment assistance program;
- $837,000 for technical assistance, premium assistance, and a purchasing crops from emerging farmers through the Good Acre’s Local Emergency Assistance Farmer Fund (LEAFF);
- $253,000 to better administer the Beginning Farmer Tax Credit (BFTC);
- $1.26 million for research and supply chain development of perennial crops
The deal also provides support for the Agricultural Utilization Research Institute (AURI), the Crookston Ag Innovation Campus, makes an important fix for ag and rural mental health, and funds a report on local and regional foods. While not everything we had hoped for, the ag bill is a meaningful step forward and certainly reflects priorities our organization brought to legislators at the start of session.
Finally, a highlight for that package, the bill approves $210 million for broadband expansion, including $50 million for the state’s Border-to-Border grant program.
Going forward, MFU will be staying engaged with legislators leading into a potential special session. Healthcare spending, taxes, support for rural schools, bonding, and a host of other items have yet to be resolved and we’re hopeful that the legislature will come together to reach a deal quickly.
Of note on transportation spending, the state needs to approve funding to unlock most of the $7 billion available to the state from the Federal Infrastructure Investment and Jobs Act. Without action, this money could go to other states who have already put up matching dollars.
It’s been a busy session and we’ve so appreciated your advocacy with legislators and feedback on MFU’s priorities. Members made calls, testified in committees, met with legislators, and of course developed the grassroots policy that informed our work this session.