MN LEGISLATURE DEBATES HOW TO UNLOAD BUDGET SURPLUS: Minnesota legislators will find themselves once again debating a budget surplus of $453 million. This is the $2 billion reported surplus, minus money appropriated to pay new education tax credits and a new property tax reform account. Some legislators are calling for tax cuts-a surplus indicates a healthy economy, but also suggests that citizens are being overtaxed. There are bills calling for income tax rebates and property tax rebates. The legislature will likely focus the surplus debate on additional property tax relief for both residential and commercial property.
HOW TO GET YOUR MN HOMEOWNER'S OR RENTERS REBATE: Part of Minnesota's $2.3 billion budget surplus will be given back to the taxpayer in the form of a one-time rebate for homeowners and renters. The rebate amounts to 20% of property taxes paid for homeowners, and 3.6% of rent paid for renters, with no dollar cap. The property tax rebate must be claimed in the 1997 state income tax returns using individual income tax Form M-1. Look for the frog symbol (What does a frog say? "Reeeeee-bate.")
Homeowners must attach a copy of their 1997 property tax statement, issued by county, to their tax form. Average individual rebates are expected to be $300 for homeowners and $175 for renters. This year, the revenue department estimates that refunds will take up to four months, due to an additional 600,000 refunds expected. Those who file electronically can expect a speedier rate of return. For more information, call the Dept. of Revenue Taxpayer hotline at 800-652-9094, or visit their website.
FEEDLOTS THE MAIN AG ISSUE THIS SESSION: Debate over the current state and the future of Minnesota's livestock industry is probably the number one ag issue this legislative session. This year's debate centers around a Generic Environment Impact Statement (GEIS) and a proposed moratorium on construction and expansion of livestock facilities.
The GEIS, for which the governor has requested $1.2 million, would look at the livestock industry's economic and environmental impact on the state. The fear is that the GEIS will come down hard on smaller, older livestock farms as less environmentally sound than new ones. The proposed suspension on construction and expansion of facilities greater than 750 animal units would be in effect while the GEIS is being conducted.
Write to the main proponents of the suspension to voice your opinion: Rep. Ted Winter (D-Fulda), 459 State Office Building, St. Paul, MN 55155 (tel: 612-296-5505), or Rep. Doug Peterson (D-Madison), 569 State Office Building, St. Paul, MN 55155 (tel: 612-296-4228).
PROPOSED BILL MAY PROTECT PRIVATE PROPERTY VALUES: The Private Property Rights Protection Act has been introduced, which would provide payment to landowners for government actions which result in a loss in fair market value to the property. Some expect a hearing this year, but say passage is not likely in '98.
MORE FLOOD RELIEF POSSIBLE: Legislators have introduced bills that would bring further relief for last spring's flooding. One provides an appropriation to construct ring dikes around farm sites in the Red River Valley; another extends last year's appropriation for a longer period of time.
MARKET ANALYST: PREP FOR POST-PAYMENT ERA-Jerry Gulke, marketing columnist for Top Producer and DTN/FarmDayta, challenged farmers to gauge their ability to stay afloat after government payments are gone. "Take your current government checks and put them into retirement or savings accounts to see how you do apart from that money," he told the Northwest Farm Managers Association at their annual meeting in Fargo.
The key to succeeding in a market-driven profession is to become number-savvy, he added. Gathering market numbers is not as important as how you interpret those numbers, he said. Alluding to the saying, "Any news you read is old news," Gulke warned producers to keep in mind that market reports in newsletters and magazines are likely to be at least a couple weeks old.
Gulke also advised the group to take their cue from businesses that pay for continuing education of their employees. "They know they'll get a return on their investment." Likewise, Gulke said, farmers should provide opportunities for family members to take accounting and technology classes.
HANDBOOK ON DRY GRAIN AERATION AVAILABLE: Those interested in learning about designing dry grain aeration systems may want to check out the University of Minnesota's "Dry Grain Aeration Systems Design Handbook," MWPS-29. The book provides guidelines for selecting, sizing, locating and evaluating grain aeration systems, and gives design examples for commonly-used systems. The book does not include design information for moving air through wet grain to hold it safely until it is dried, or for cooling hot grain coming from a dryer.
To order the handbook, send a check for $21.30, payable to the University of Minnesota, to UM Bio Ag Eng Dept, Attn: MWPS, 219 BioAgEng, 1390 Eckles Ave., St. Paul, MN 55108. Or, call (612) 625-9733.
FEDERAL CROP INSURANCE FACES BUDGETEERS' SCRUTINY: The new federal vision of a farm safety net, crop revenue insurance, is coming under attack by some urban lawmakers who think the government is paying too much to the private companies which administer the program. Thus, the whole program may face budget fights when the federal budget comes to the House floor.
To head off part of this clash, USDA is proposing to take sales commissions out of "discretionary" accounts (subject to Congressional slicing and dicing), and include them in "mandatory" accounts, which are not subject to debate. The move would increase mandatory spending by $185 million, effective in year 2000. The catch is, a mandatory account comes under the pay-as-you-go rule, which requires a budget offset for any increase in spending.
The debate centers around where to make the budget cut. It could include a reduction in the amount of federal subsidy involved to run the program, which may then result in a $100,000 limit per farmer on catastrophic loss payments. Reimbursement rates might also be adjusted downward. These changes, too, would not occur until Fiscal 2000.
Currently, 63% of insurable acreage is covered by some aspect of federal crop insurance. About 22% is covered at the catastrophic risk level (50% of approved yield indemnified at 60% of the expected market price), and 41% at higher levels.
NEW "EURO WAL-MARTS" MAY BRING BOOST FOR GRAIN INDUSTRY: For baking and other parts of grain-based food, Wal-Mart has become an increasingly formidable presence in America as it has opened 436 "Supercenters," selling food as well as general merchandise. Aspiring to be the nation's leading food retailer as well as merchandise retailer, Wal-Mart quickly assumes a major role in the evolution of the bread and related markets wherever it sells groceries. Now, Wal-Mart Stores has purchased a German chain of hypermarkets (group of small shops under one roof). Extending the chain's influence around the world is a possibility that has grain-based food companies tickled pink.
The acquisition of Germany's Wertkauf chain includes 21 hypermarkets and sales of $1.4 billion. Wal-Mart hopes to provide a boost to grain-based foods a la McDonald's, which introduced food on a bun to millions of people around the world who otherwise might not have recognized the versatility of the bun.
Minnesota Association of Wheat Growers
2600 Wheat Drive
Red Lake Falls, MN 56750
218-253-4311