When it comes to two key policy issues facing farmers, the candidates for the 47th House District agree: nothing should change.
Incumbent Rep. Rick Rand, Democrat of Bedford, and Republican T.K Broecker of La Grange faced questions from chairmen of the Henry, Oldham and Trimble Kentucky Farm Bureau Boards.
Both candidates agreed not to change the two key issues of concern to the organization: sales tax exemptions for production agriculture and the cap on state revenue from real property taxes during a candidate forum hosted by Kentucky Farm Bureau Thursday.
“If the intent is to keep the tax rate without raising, then I support it,” Broecker said. “We have to learn to be lean with what we have. With putting additional taxes on anything you are limiting spending. It hurts the business or the person.”
House Bill 44 plainly limits property tax revenue to four percent. Pat Henderson, chair of KFB’s tax advisory committee, said in a meeting earlier this month that farmers and landowners could not endure a tax increase.
Rand, who is a co-chair of the appropriations and revenue committee, agreed with Broeck’s position.
“I support House Bill 44. I think it has been important for the agriculture community to help keep property taxes in check not only in terms of rate,” Rand said. “A farm is the primary asset that most farmers have. Most of their lives and their wealth is caught up in the land and it is important if we want to maintain a strong agriculture community we need to maintain House Bill 44.”
Rand admitted that while serving on the tax commission he had not heard much discussion in regards to the bill nor changing sales tax exemptions for production agriculture. Agriculture production is unique as farmers can’t pass on the increased cost of fuel or fertilizer and other production costs in their products. Henderson warned removing sales tax exemptions would incur a six percent increase in production and would destroy agriculture business as surrounding states have sales tax exemption in place for agriculture.
Rand said the tax commission is looking at ways to modernize its tax structure and how it can be done with a different economy that has less of a manufacturing base in the state.
“The tax exemption farmers receive, it’s critical and agriculture receipts have topped at $5 billlion this year for the first time in Kentucky,” Rand said. “It tells me we are doing something right in Kentucky in terms of how we are investing in agriculture.”
With the present focus moving from tobacco for farmers throughout the state, Kentucky has become the largest beef producer east of the Mississippi at 8th in the country Rand said and these are the type of things that farmers can invest in with relief money for improving their farms.
Broecker admitted he had limited experience with farming but agreed the tax exemption needed to stay.
“In manufacturing in my business, everything that I use to manufacture my product is tax exempt,” Broecker said. “Whatever you use to create products in farming whether it’s crops or cows — whatever you are using needs to be tax exempt.”
Broecker also stressed in regards to the tobacco relief fund and HB 611 that the farming community needed to maintain its 50 percent(half of the tobacco settlement relief fund farmers receive) as part of its agriculture development fund while looking for innovation.
“I do understand that the settlement ends in two or three years,” Broecker said. “I think we should maintain our 50 percent as long as we can, but also from a business stand point the industry has changed. Business has changed and farming has changed.”
Broecker said the agriculture industry needed to push forward since farmers are no longer growing tobacco. He cited industrial hemp as a viable crop that could easily be grown on five acres and a biodiesel company in Owensboro that if it proved to be profitable should be done locally.
“The settlement is ending and you have to adapt,” “Broecker said. “ In my business, you adapt or you are gone.”
Rand said Kentucky is envied for what the state has done with its tobacco relief fund as some states rolled it into their states general fund. He assured attendees that he would continue to secure the 50 percent of relief money as long as he serves in the General Assembly, but the settlement amount reduces every year.
“The money comes in via a formula and part of that formula is production, smoking and rates,” Rand said. “At one time the settlement was at $120 million a year and now is in the mid $90s.”
Rand would like to see the formula change with more money going to agriculture given the success of funding agriculture development in switching tobacco dependant areas into other forms of agriculture.
“It will be hard as the other side of that money goes to smoking cessation and early child development, “ Rand said. “ It’s going to be hard to do, but they get money from other places. The amount is shrinking, but you can tell the difference it has made our communities just by driving through the county.”
Kentucky Farm Bureau chairmen asked both candidates about insurance settlements, education and expanding agriculture markets and rural development. The candidates were given questionnaires and their answers will be shared with Kentucky Farm Bureau customers.
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