Budget Beast Begins Journey Through Legislature; Tax Credits Benefit Irrigators; Charitable Giving

One of the first pieces of legislation to hit the ground during each legislature is the state’s budget. It’s usually the last piece of the puzzle to get solved, too. Balancing the budget each session is one of the most challenging tasks the legislative body takes on; agencies, members of the public and the Governor all have requests and priorities for the state’s piggy bank.

Our industry is no different. We aren’t making any specific asks for General Fund dollars but we do closely follow the budget hearings of several agencies and the Extension Service and the Montana Agriculture Experiment Stations (MAES). This week we spent time in the preliminary budget hearings for the Department of Livestock, MSU Extension and MAES.

When the budget process begins, the House Appropriations and Senate Finance & Claims Committees form a series of smaller, joint committees that hear different sections of the overall budget. After these initial hearings are complete, the entire budget will be heard before the House Appropriations Committee. Once passed out of committee it will be heard on the House floor before being transmitted to the Senate.

Department of Livestock Budget:

It’s been an uphill battle for this Department after they experienced some high profile budget issues during the 2015 Legislative Session. After receiving a significant amount of Special Revenue funding to correct issues with a misallocation of brands re-record funds and a nearly depleted Per Capita Fund, this agency was given a one time only budget. This means they weren’t guaranteed any funding in the next biennium and would have to come to the Legislature prepared to defend their financial status.

Alongside industry stakeholders, the department worked hard to right the ship and correct their budgetary issues. Tuesday’s hearing reflected a 180 degree turn. Department personnel reported on divisions that have strong financial positions and streamlined protocols.

In addition to some good old fashioned belt tightening the Department also restructured into three divisions to cut costs: Brands, Animal Health & Food Safety and Centralized Services. They’re boasting a healthy Per Capita Fee fund balance which allows them to administer animal health, predator control and theft investigation programs among others.

Montana Farm Bureau supported the Department’s budget and the positive progress they continue to make.

Montana Ag Experiment Station (MAES) & MSU-Extension Budgets:

A common misconception about Montana’s Agricultural Experiment Station (MAES) and Extension is that these programs only operate in Bozeman to the benefit of Montana State University. In reality, both of these programs benefit the farmers and ranchers from every corner of the state that utilize them. MAES has seven off-campus Research Centers and local campus farms that address production and production challenges in the diverse agro-ecosystems of the state. Likewise, the MSU-Extension program encompasses 92 agents, living and working in more than 60 offices and communities statewide. These professionals serve in their local communities and counties, responding to emerging needs of families, producers, businesses and industry.

Budgets for MSU-Extension and MAES are included in Section E of the Governor’s overall budget (HB 2). Montana Farm Bureau supports both of these programs, so we were encouraged to see both MAES and Extension receive a bump in funding this year. The proposals were heard in the Joint Appropriations Subcommittee on Education on Jan. 16. The long line of proponents waiting to voice their support of these programs is testimony of the work they’re doing for the agricultural community in Montana. Farm Bureau was proud to be among them. 

SB 81, Extend deadline to correct an application for water right permit or change:

Sponsored by Sen. Jill Cohenour (D) SD-42, East Helena

Many water right changes are complicated in nature, and the Department of Natural Resources requires an extensive amount of information from an applicant to quantify the historical elements of a water right and to show that the change conditions are not likely to cause adverse effects to other water users.

This bill would afford an applicant in a water right change proceeding additional time to respond to deficiencies (typically a request for additional information) in a change application. Currently, an applicant is provided 30 days to respond to a DNRC request before losing their priority date. They may, however, opt to extend that date to no longer than 90 days. SB 81 would extend the afforded 30 days to 120 days.

Montana Farm Bureau members support a simplified and less-costly change process that still maintains protection for senior water rights. We supported this bill as it eases the burden to provide information on such a time crunch, but does preserve the need for a deadline. Were the time requirement to be removed entirely, applicants could retain their priority date while requesting a very distant time extension.

 SB 111, Extend termination date of qualified endowment tax credit:

Sponsored by Sen. Mark Blasdel (R) SD-4, Kalispell

This bill simply extends the termination date of the tax credit given to people and businesses making charitable donations to a qualified endowment. An example of a qualified endowment is Montana Farm Bureau’s Foundation whose mission is to support Montana agriculture through education, research, and community support, with a special emphasis for the development of our youth. We support the tax credit as a way of incentivizing charitable giving to worthy causes such as our Foundation’s.

HB 24, Revising allowable water costs used for valuing irrigated agricultural property:

Sponsored by Rep. Alan Redfield (R) HD-59, Livingston.

The Department of Revenue (DOR) determines agricultural land valuation by identifying the productive capacity value. They use an established formula to calculate the value and the formula takes into consideration a variety of factors. One of those factors is the per-acre productive value of agricultural land in each subclass. Irrigated land is one of those subclasses and this bill seeks to simplify reporting process for both the Department of Revenue and the landowner.

Under current law, the DOR sends out a yearly survey to irrigated landowners so that they may report their energy costs per acre, which will be deducted against the value of the land. In addition to the energy costs, a base water cost of $15 per irrigated acre is deducted, as well as a standard deduction for labor costs depending on the type of irrigation. Many irrigators already hit or exceed the maximum per acre deduction of $50 each year. Rep. Redfield’s bill simplifies the valuation process by doing away with the reporting and simply assigning the maximum $50 deduction for all irrigated acres.  Montana Farm Bureau policy supports this change.

2019 MFBF Legislative Events:

Jan. 31-Feb. 1 – MFBF Young Farmers & Ranchers Calling on the Capitol

Jan. 31 – Lewis & Clark County Farm Bureau Meet the Bulls

 Feb. 12-13 – MFBF County Farm Bureau Calling on the Capitol

Feb. 13 – Montana Farm Bureau’s 100th Birthday Celebration, Capitol

Feb. 27-28 – MFBF Council of Presidents

Please join Montana Farm Bureau at these events. For information on the Young Farmers & Ranchers Calling on the Capitol, contact Sue Ann Streufert at 406-587-3153, [email protected]. For the Council of Presidents and MFBF Counties Calling on the Capitol, contact Alena Standley, 406-799-9955, [email protected].