On Thursday, March 11, President Biden signed the American Rescue Plan, a $1.9 trillion COVID relief package that will send $1,400 checks to most Minnesotans, provide resources for reopening schools, improves vaccine distribution to rural communities, increase the child tax credit and otherwise address the public health and economic needs of the country. This package is important for the state legislative session because it provides nearly $5 billion to Minnesota’s state, local and tribal governments. For context, Minnesota’s last biannual budget was approximately $48 billion. The stimulus payments and other initiatives aimed at jumpstarting the economy also improve the state budget officer’s revenue estimates (i.e. from collecting more taxes on purchases), contributing to a one-time projected surplus of $1.6 billion going to into the upcoming two-year budget cycle. This shot-in-the-arm from the federal government will make it more likely that legislators can deliver on MFU priorities like broadband development, meat processing and biofuels infrastructure—all of which require new spending.
Related to previous COVID relief, and important to MFU members who received forgivable Paycheck Protection Program (PPP) loans, the Minnesota Senate passed legislation that would conform with federal law and make sure that farmers and others won’t owe income tax on those relief funds. Senator Tom Bakk (I-Cook) led the $438 million package, which passed on with bipartisan support (55-12) in the Senate, though some DFLers raised concerns that, while important, the package should have done more for workers. MFU shared testimony in support of conforming with federal tax law—and doing so ahead of the end of session—because many farmers are already filing their taxes.
“PPP loans helped many of these farmers other rural small businesses cashflow their operations and retain employees through the ups and downs of the pandemic,” MFU President Gary Wertish shared in written comments. “This would provide needed relief to farmers and others, many of whom have seen their operations negatively impacted by the COVID-19 pandemic.”
The proposal still needs to be approved by the Minnesota House and signed by the Governor. On Monday, the House declined to suspend the rules to take up a vote and referred the Senate-passed package to the House Tax Committee where Chair Marquart (DFL-Dilworth) has been working hard to develop consensus around a similar proposal. PPP loans, which are forgivable if used for payroll and eligible expenses and are available to sole proprietors (which includes many farmers), are still available to new applicants until March 31. Since these loans are administered through local lenders, a good first step is to contact your lending agent to confirm that they work with Small Business Administration (SBA).
Also in the tax committee, MFU shared testimony in support of expanding a tax exemption for capital equipment purchases to meat processing plants. This initiative, brought forward by Rep. Swedzinski (R-Ghent), is another way to support the development of new small and mid-scale processing plants, for whom startup costs is a key concern. This type of an initiative would pair well with present and proposed state and federal investments in meat processing.
In the House Agriculture Committee, Chair Mike Sundin (DFL-Esko) heard legislation that would reauthorize cooperative development grants at the Minnesota Department of Agriculture (MDA). Vice Chair Samantha Vang (DFL-Brooklyn Center) introduced this legislation, which was brought forward by MFU. Mirroring a similar program that was available at the MDA some years ago, this proposal would allow the department to make grants to farm cooperatives of up to $50,000 for startup costs including of organizational development, financing, marketing analysis, and other investments need to start a processing or marketing agricultural products.
In introducing the bill to the committee, Vice Chair Vang shared how this initiative will help Minnesota farmers who are “growing new, often high-value crops, for which the market and supply chain is still emerging.” She is a champion for Minnesota’s industrial hemp industry in Minnesota.
MFU member and founding member of the Perennial Promise Growers Cooperative, Ben Penner, shared how this proposal would help his cooperative get off the ground and build a sustainable market for perennial grains developed by the University of Minnesota’s Forever Green Initiative. Miah Ulysse, representing 40 Acres Coop, talk about how his could help the black-owned hemp cooperative add value to their products through processing. The bill will be considered for inclusion in the Agriculture Omnibus Finance bill—the final end-of-session package that funds MDA.
On Monday, Chair Sundin’s committee held the first hearing of the Governor’s budget recommendations, which form the basis for the Ag Omnibus Bill. MFU shared strong support for increasing access to meat processing, investing in climate-smart agriculture, helping stations upgrade their pumps to use higher blends of biofuels, supporting land access and farm transition, and a number of other important initiatives.
“While agriculture is the foundation of Minnesota’s economy—generating $112 billion in economic impact and supporting more than 430,000 jobs—our budget for MDA makes up less than 1% of the state’s overall budget,” said President Wertish in written comments. “We support growing that investment in farmers and rural communities.”
President Wertish also gave strong testimony in support of increasing the state’s biofuel blend rate from 10 to 15% in the coming years. He explained to House Commerce Committee members that this provides important benefits to not only farmers, but also urban and suburban residents who will experience improved air quality and lower prices at the pump.
In the Senate, Chair Torrey Westrom’s (R-Elbow Lake) committee heard a proposal to increase funding for Minnesota’s Farm-to-School programs, which can strengthen local markets for producers all while introducing young people to nutritious food. This legislation, led by Senator Mike Goggin (R-Red Wing) seeks an additional $4 million for successful programs currently serving students and farmers at MDA.
MFU has also shared testimony in support of these initiatives and others, including making Community Solar more available to farmers, establishing an special license plate to pay for ag education, funding the emerging farmers working group and funding reimbursements for producers who experience wolf and elk depredation.