SD18 Issues: How will Scott Newman support farmers?

Yesterday, I took a look at the positions on state spending that Scott Newman laid out in his answers to ten questions asked by Ford Peterson and posted to his blog, MN Patriots. Another question and answer also raises questions about Newman's fit with the district:

Business Subsidy and “Making” Jobs: The public is calling for the government to ‘make jobs’ at an unprecedented rate. Asking government to borrow more money and spend it on ‘works projects’ expands the already exploding deficit. Decades from now economists will debate whether the Trillions of Dollars spent on bank bail-outs, car company take-overs, and artificially low interest rates were necessary to save the nation’s economy from the natural implications of unwise lending practices initially designed to ‘stimulate’ construction jobs. Ethanol from corn has been scientifically demonstrated to be counter-productive yet we subsidize the plants producing it. Crop producing land receives significant reductions in property tax, which is a substantial portion of the commercial tax base from which rural citizens are expected to pay for urban style education—in essence subsidizing cheap food for urban residents. Rural taxes are collected and spent on urban mass transit to subsidize urban commuters. Construction projects are subsidized by artificially high wage rates. The government hiring additional public safety, education, and maintenance workers does not create a sustainable economy of scale. Quite the contrary, it does less with more.

4) Do you support the elimination of all business subsidy? Including the subsidy for corn, milk, ethanol, farm property tax, mass transit, construction projects, public service wages, etc. This includes stopping the up-coming ‘make jobs’ projects likely to be part of the next round of budget talks.

Newman: Yes. It is not the role of government to artificially assist one group of business and not others. I would rather let the market determine whether a business is viable. Remember Reagan’s sarcasm; “if it moves tax it. If it stops moving subsidize it”. 

The parts of the question I set in bold are of particular interest in a largely rural district like Senate District 18. Litchfield is home to the First District cheese plant, while Bongards is located in nearby Carver County (and some of the co-op's dairy farmers live in the district). Workers at both First District and Bongards are represented by a Teamsters local whose chief officer lives in the senate district. I don't know of state subsidies to diary farmers; milk payment programs are federal.

Additionally, three ethanol plants are located just outside of the district, in Winthrop, Buffalo Lake and Atwater. I'm checking on which incentives these plants, which are farmer-owned cooperatives, receive. Farmers within the district belong to the cooperatives.

[Update: According to State Rep. Al Juhnke, who chairs the Minnesota House Agriculture, Rural Economies and Veterans Affairs Finance Division Committee, the older plants at Winthrop and Buffalo Lake receive state payments for the first $15 million of fuel each plant produces each year, while the newer Bushmills' plant in Atwater, which is in his district, does not. He noted that the plant at Winthrop is nearing the end of the period during which it can receive state payments, which are $.20/gallon up to 15 million gallons per plant for 10 years.

The federal blender credit  for ethanol goes to the oil companies that mix ethanol with gasoline, rather than to local farmers. Corn and milk subsidies are federal programs [end update].

So far as I have been able to determine, the chief means by which property taxes are reduced on crop producing land by the state is the "Green Acres" program. As page 11 of a report by the Legislative Auditor indicates, a very high percentage of the  farmland in McLeod and Southwestern Wright County were enrolled in the Green Acres program in 2007. Meeker County uses the program to a far lesser degree, not unexpected since it's the farthest away from the Twin Cities and was subject to far less development pressure during the housing boom earlier in the decade. Nonetheless, Meeker and McLeod lost over ten percent of their farmland between 1982-1997.

The program raised residential taxes on homesteads between ten and twenty percent in Wright County, while taxes on homes rose between two and ten percent in McLeod. The effect was minimal in Meeker County (page 24). [Aside: recommendations in this report on the use of Green Acres of "vacant" land not being farmed led to legislation which has created an uproar].

The district as a whole is farmland. According to page 5 of the report, over ninety percent of McLeod County is farm land (no surprise!), while Meeker and Wright Counties are over seventy-five percent farmland. 

Update: Counties tax farmland at a different rate (Ag1; Ag2) than residential homesteads, rental homes and commercial property. It sounds like Newman is agreeing with the idea that farmland should be taxed at the same rate as commercial property, and the tax break that farmers get through the state "Green Acres" provision should be ended as an unfair tax preference. He does answer "yes" to the question in which "farm property tax" is singled out as a subsidy. [end  update]

As for the concern in the question about "urban-style schools,"  I'm hoping this issue is articulated more fully during the senate race. Does it mean the new Howard Lake-Winsted-Waverly high school? Or is it an echo about the closing of the McLeod County West district, which died for lack of money to maintain the buildings that literally began to fall down around its students?

I'll be following these issues as all candidates running in SD 18 articulate their positions.

Photo: The Bushmills ethanol plant, built in 205 just over the Kandiyohi County line near Atwater.  Farmers in SD18 are members.

Comments

[Ford Peterson]

Thank you for the clarifying update to this posting. It is often difficult to determine the source of the welfare payments as the state often administrates federal programs--blurring the lines of responsibility.

In fairness, Mr. Newman was responding to his idealogical approach to the notion of "subsidy," which according to the question includes mass transit, construction projects, public sector make work jobs, as well as farm business subsidy. Singling out farm welfare is a polarizing and unfair characterization of the question, and his response.

I think all District 18 voters, as well as Mr. Newman, would welcome the opportunity to openly discuss this topic, and others, with the DFL candidate Hal Kimball, who so far is unwilling to discuss ANY topic of interest to this district.