“CAP AND TRADE” may be capped for the time being, but other regulatory threats to agriculture linger in Washington, leading to a Farm Bureau-sponsored rally. .......2
T H E U. S . S E NA T E h a s approved long-awaited restoration of an expired tax credit seen as crucial to the biodiesel industry’s future. ...........................................3
USDA HAS ABANDONED the National Animal Identification System (NAIS) and announced it will promote a flexible framework for animal disease traceability. .......4
Monday, March 15, 2010
Two sections Volume 38, No. 11
Prospects appear good for estate tax fix BY MARTIN ROSS FarmWeek
Prospects appear good for some form of ramped-up estate tax relief this year, if Senate support gels and budget-deficit concerns don’t obscure concerns from the countryside. Under a 2001 tax bill loophole, the estate tax expired Jan. 1 but is set to return at pre-2002 levels in 2011. Lawmakers must quickly address 2011 tax concerns, or “come Jan. 1, we will have estate taxes back on the books with a very low exemption level of $1 million per person and a very high (tax) rate of 55 percent,” American Farm Bureau Federation policy analyst Pat Wolff told FarmWeek during last week’s Illinois Farm Bureau Leaders to Washington tour. Wolff sees “the will in Congress to provide more relief,” but argues a House plan to restore 2009’s $3.5 million exemption, with no consideration for inflationary impacts on estate values, is inadequate to protect heirs from potentially liquidating assets to cover their taxes.
Farm Bureau is pinning its hopes on a proposal from House Ag Chairman Blanche Lincoln (D-Ark.) and Senate Republican Whip Jon Kyl (RAriz.) to reinstate the tax with a $5 million individual, $10 million per couple exemption, adjustable for inflation. The Lincoln-Kyl bill proposes a 35 percent maximum estate tax rate and full “stepped-up basis,” a Farm Bureau-supported provision. The bill would enable heirs to take the fair market value of an estate for capital gains purposes and pay capital gains tax on the difference between the net sales price and that stepped-up basis — if and when they sell assets. Wolff reported Lincoln and Kyl are working on a way to make their plan “revenueneutral” — a key factor in garnering support from budget-conscious colleagues. Rep. John Shimkus, a Collinsville Republican, fears lawmakers may be tempted to let estate tax reform “lapse,” sug-
gesting that amid 10-year deficit projections, they may feel the revenues the high rates and low exemptions would generate are needed. Shimkus stressed that if the Senate acts first to provide relief, “we’ll pass it in the House.” However, he noted Sen. Byron Dorgan (D-N.D.), a lead advocate for estate tax relief, is not seeking re-election this fall, while Lincoln faces a tough race to keep her seat next fall. Wolff nonetheless believes influential Senate Majority Whip Dick Durbin, a Springfield Democrat, will support relief: “He wants to get this issue off the (Senate) plate.” Durbin told the Farm Bureau leaders he would back changes that “respect appreciation in (estate) value,” and was optimistic action would be taken this session. “This has to be done, and it has to be done this year,” he said.
Quinn: Cut ed funding or hike income tax IDOA sees $6.9 million in operating program cuts BY DAVE MCCLELLAND FarmWeek
Periodicals: Time Valued
U.S. Sen. Dick Durbin, a Springfield Democrat, discusses issues ranging from the estate tax to climate change policies with Illinois Farm Bureau Leaders to Washington last week. Leaders made the rounds of congressional offices and attended briefings with American Farm Bureau Federation policy experts and USDA officials. For more details of the lobbying tour, see stories inside. (Photo by Martin Ross)
In what amounted to an ultimatum to the General Assembly, Gov. Pat Quinn last week said he was proposing a $1.3 billion cut in the state’s education funding unless legislators approve a hike in the income tax. Calling his proposed reduction in education funding “the most painful cut of all” in a budget address that proposed several cuts, including some in the ag department, Quinn said slashing state funding across the board to address a $13 billion budget deficit would be “both heartless and naïve.” He said the cut in education
funding, in lieu of a hike in the income tax increase from 3 percent to 4 percent, was needed because $1 billion in federal stimulus funding that had protected education from funding cuts comes to an end July 1. The 17 percent cut in state funding for education would amount to a $1 billion cut from elementary and secondary education funding; the remainder would come from higher education. It is estimated the reduction in elementary and secondary education would reduce the general state aid per pupil from the current $6,119 to $5,600. Only by approving an increase in the income tax —
which would increase tax revenues by about $3 billion — will it be possible to preserve education funding and “keep thousands of committed teachers from getting layoff notices in the next few weeks,” Quinn said.
FarmWeekNow.com For more reaction and details on the proposed budget, go to FarmWeekNow.com.
“I think it is wrong — and short-sighted — to cut education funding,” said Quinn as he announced the cuts. The governor’s budget contained two other major elements: A $1.1 billion appropriation for a capital program that would be leveraged with federal and local dollars to fund $6 billion in construction projects and creation of a Small Busi-
ness Job Creation Tax Credit that would provide a $2,500 tax credit for each full-time job created by employers with 50 or fewer employees. AGRICULTURE FUNDING is proposed to be cut by $6.9 million as Quinn announced proposed cuts of $214 million in overall state operations. Most operating programs within the Illinois Department of Agriculture, as well as pass-through programs such as Extension, Soil and Water Conservation Districts, and county fairs, would see cuts. Some programs would have their appropriation eliminated. Those include Agrability, the Ag Leadership Foundation, the Farm Resources Center, and the Council on Food and Agricultural Research (C-FAR). See Quinn, page 3
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