Legislative Notebook: Farmers await clarity on how tax bill affects them
ST. PAUL — Farmers are not sure how much more they will be taxed after the Democratic-controlled Legislature adopted a $2 billion tax increase.
It appears that farmers will pay sales tax on fertilizer stored in facilities they do not own and on equipment repair, but not parts. Rural legislators said they remain uncertain what else could be taxed.
Rep. Rod Hamilton, R-Mountain Lake, arose during late Sunday debate on the legislative tax bill to question the impact on agriculture.
House Tax Chairwoman Ann Lenczewski, DFL-Bloomington, said she is not a farmer and could not answer all of Hamilton’s questions.
“Our intent is to take another look at this,” Lenczewski said.
The tax provisions do not begin until April, giving lawmakers a chance to change the law after they return to session Feb. 25.
“I think we understand some of the complications here,” Lenczewski said after hearing from Hamilton and other rural Republicans.
Legislators began debate soon after the tax bill was released. Once Hamilton saw the potential agriculture impact, he began contacting farm groups, which expressed their concern.
Democrats, however, said there is enough good in the tax bill for farmers that the added tax should not hurt them.
“I do know what they are going to benefit from in this bill,” Rep. Paul Marquart, DFL-Dilworth, said, including lower property taxes.
Marquart said the bill boosts county and township assistance, which should lower property taxes.
Rep. Joe Radinovich, DFL-Crosby, said farmers are concerned about their overall community and new taxes are helping programs such as in education.
Rep. Erik Simonson, DFL-Duluth, said his community warehouses taconite, wind turbines and other goods that would be taxed under the bill. Even so, he said, he supports the new tax.
Red Wing Shoes could face problems with the new tax, said Rep. Tim Kelly, R-Red Wing. The company needs a new warehouse, he said, and it could be built in Missouri.
“If they put that warehouse in Missouri, where do they expand their business?” Kelly asked. “Where do they make more shoes?"
Unions win right
Union supporters celebrated Monday after the House voted 68-66 to allow some child care providers and personal care attendants to join unions.
Five Democrats joined Republicans in voting against the measure: Reps. Tim Faust of Hinckley, Jay McNamar of Elbow Lake, Tina Liebling of Rochester, Kim Norton of Rochester and Gene Pelowski of Winona.
Pro-union child care providers and care attendants were happy, saying they will do better because unions will be able to get more state funds for them, as well as better rules.
“My work helps the state save countless dollars that would be spent on a long-term care institution if I wasn’t there to work with my grandson and keep him living independently,” Vicki Dewald of Detroit Lakes said. “By forming a union we can improve conditions for workers, which will keep good PCAs and improve the quality of care clients receive.”
The bill, expected to be signed into law, will give providers a more stable state funding source, Rep. Carly Melin said, after years of budget cuts.
“We are not forming a union here today, we are authorizing people the right to vote,” the Hibbing Democrat said.
Union opponents say the bill is unconstitutional and expect to challenge it in court, probably within days.
Rep. Mary Franson, R-Alexandria, told about her years as a child care provider, a business she started in part so she could care for her children.
“I ask you to search your hearts today,” she told her colleagues before the vote.
“This bill places unions and government between child care providers and their clients,” said Rep. Steve Drazkowski, R-Mazeppa.
Legacy spending OK’d
The House approved a bill 77-57 and the Senate 43-21 to fund outdoors and cultural programs.
The so-called legacy bill spends about $496 million on parks and trails, arts and other programs with the money raised from a sales tax voters approved in 2008.
The bill faced some resistance earlier in the session as lawmakers debated rural and urban program funding, and some rural lawmakers continued to complain Monday that parks in their areas were shorted.
The parks funding is split to 40 percent for the Twin Cities area, 40 percent for state parks and 20 percent for greater Minnesota parks.
The bill also creates a greater Minnesota commission to make parks and trails recommendations.
It includes funding for projects such as the Cannon River headwaters, the Lakewalk Trail in Duluth, the Mesabi Trail and parks in Bemidji and Moorhead.
Rep. Mary Franson, R-Alexandria, and other members said sports groups and organizations are opposed to the bill.
“I don’t understand why,” said bill author Rep. Phyllis Kahn, DFL-Minneapolis. “It does exactly everything they asked us to do.”
She said the bill follows recommendations from the Lessard-Sams Outdoor Heritage Council and shows a “strong commitment” to arts and cultural programs.
“We provide the resources needed to enrich our communities and keep our land, water, and air clean and healthy throughout Minnesota,” she said.
Tax levies limited
One of the little-noticed provisions of a tax bill legislators approved near the end of their session limits city and county property tax levies.
One of the last additions to the bill placed a one-year levy limit on cities bigger than 2,500 population and counties 5,000 or larger.
The League of Minnesota Cities reports that the cap “essentially limits revenue growth to 3 percent for taxes levied this fall for collection in 2014.”