Republicans push $30 million a year in farm tax breaks
Lawmakers are moving quickly on a pair of bills cutting taxes for Wisconsin farmers by nearly $30 million a year, after Democratic Gov. Tony Evers called for the Legislature to take emergency action to help the state’s agriculture economy.
The Republican-authored bills were introduced Monday and the Assembly’s agriculture committee voted unanimously Tuesday to advance them after a hastily called public hearing. The bills could be taken up by the full Assembly next week, but it’s unclear whether the Senate and Evers will go along with all of them.
Evers proposed an $8.5 million package of agriculture proposals that didn’t include any tax cuts. The plan from Assembly Republicans, who promised a “bigger and bolder” proposal than what Evers put forward, would cost about $36.6 million this year. The bulk of that — nearly $30 million — would be for tax cuts benefiting farmers.
Evers last week expressed concerns about the tax cuts not having an immediate impact. Democrats on the Assembly agriculture committee voted for the tax cuts, which also drew broad support from the state’s agriculture community.
“This bill would put $27 million directly into the pockets of farmers at a time when their No. 1 issue is cash flow,” said Rep. Travis Tranel, sponsor of a bill that would extend a $7,500 tax credit to qualified farmers this year and the next two. “This is a short-term fix. Not going to solve all of the problems, but certainly alleviate some of the stress.”
The credit would be capped at $7,500 and be equal to about 66% of the taxes levied on buildings and other improvements that are used exclusively for farming. Farmers would have to have at least $35,000 a year in cash farm income.
Farmers could apply for a rebate this year, which Tranel said could be distributed by summer, then qualify for an income tax credit each of the next two years.
Another bill heard by the committee would provide an estimated $2.5 million in tax breaks for farmers by allowing them to deduct the cost of health insurance from their income taxes. That measure would also cut taxes by an additional $7 million a year for other non-farmers who are self-employed.
Together, the tax cuts would be about $36 million a year.
Tranel defended the cost, noting that agriculture is a $100 billion industry and the state is projected to have a $450 million budget surplus by the middle of next year. Wisconsin is home to nearly 65,000 farms, but the state’s $46 billion dairy industry has been hit hard in recent years amid low milk prices. Wisconsin has lost a third of its dairy farms since 2011, an average of two a day.
“When you’re talking about a $100 billion industry, a $27 million investment in our farm is a significant investment, sure, but I think it’s also very appropriate,” said Tranel, whose family operates a dairy farm in Cuba City in southwest Wisconsin.
The $7,500 tax credit would help “jump start” the state’s agriculture economy, Wisconsin Farm Bureau lobbyist Debi Towns told the Agriculture Committee.
“The past four years have been really rough in production agriculture,” she said. “We need to lift up the industry and recognize the important role it plays.”
The package also includes spending $5 million starting in the middle of 2021 to expand exports of milk, meat, specialty crops and other agricultural products. That is five times as much as Evers proposed. There would also be a $600,000 grant, available this year and next, to assist smaller dairy processing plants that produce no more than 50 million pounds of product a year.
There isn’t much time left for the Legislature to act. The Assembly only plans to convene three more days before quitting work for the session next week. The Senate plans to meet one day next week and for a final day in March.