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Finance Committee improves budget from ag perspective

June 6, 2013 | 0 comments

The powerful state budget writing committee, which has been working through the state budget presented by the governor, "has done very well on agriculture issues," said veteran lobbyist Paul Zimmerman, executive director of governmental relations for Wisconsin Farm Bureau.

The Joint Finance Committee, which was expected to finish up with its budget proposal June 4 or 5, has made some changes to Gov. Scott Walker's budget and many of them benefit agriculture, Zimmerman told Wisconsin State Farmer.

Lawmakers decided to restore funding for the Buy Local, Buy Wisconsin grant program. Walker's proposal had cut that $200,000 from the state's budget.

Also restored was full funding for county conservation staff. In the past DATCP has had $9 million for distribution to the county's for conservation staffing - $5 million from the DNR environmental fund and $4 million from taxpayers in the form of general purpose revenues (GPR.)

In the budget plan the committee started with from the governor, the GPR portion of this program was reduced by nearly $1 million.

The committee restored the GPR portion of this fund recently as well as adding funding to county fairs. Fair funding was raised from $356,000 per year to $406,000 per year.

When the state budget is all said and done it will settle at about $69 billion or $35 billion per year of the biennium. "There are a lot of growing needs in the state, for transportation, corrections and health.

"There's more desire for money than there is money to go around," Zimmerman said.

During this year's budget discussions there has also been a proposal for comprehensive tax reform.

One part of that proposal is to change the Farmland Preservation Program from a tax credit, administered by the Department of Revenue to a direct payment program administered by DATCP.

The proposed plan would also eliminate some of the individual tax credit programs, like the dairy and livestock tax credit program.

"One of the rationales here is that lawmakers don't want farmers, or other businesses, to make businesses decisions based on tax burdens," Zimmerman said. "Comprehensive tax reform isn't something as an organization we've weighed in on."

Until the Finance Committee passes its final motions the outcome of that tax reform proposal won't be known.

Zimmerman said that though this year's budget plan is shaping up to be a "bare bones" budget, Joint Finance has improved it from the perspective of agriculture.

Agricultural issues have the ability to get support from lawmakers on both sides of the aisle and can reach across and get support from lawmakers with a variety of interests. "We've been fortunate to stay out of many political fights," he said.


Though the Department of Agriculture, Trade and Consumer Protection (DATCP) is vitally important to state agriculture, it is a small agency compared to others.

According to a Legislative Fiscal Bureau paper, DATCP's budget is around $100 million per year and there are 600 authorized full-time employees there. With job vacancies there are about 550 employees working there now.

"DATCP is an important agency but it's small by comparison," Zimmerman said.

The Fiscal Bureau noted that the Department of Natural Resources (DNR) budget is $570 million and it has about 2,600 employees. Even bigger is the Department of Transportation (DOT) that has a budget of over $2 billion.

With federal highway money added in, the agency has $3 billion per year in its budget and has 3,400 employees

At DATCP, 60 percent of the budget comes from fee revenue - license and other kinds of fees. Only 25 percent of the agency budget is from general purpose revenue.

Fifteen percent of the DATCP budget comes in the form of federal money and that is dropping from $21 million to $14 million.

Because of the way its budget is structured, says Zimmerman, DATCP really relies on fees like the surcharge paid on fertilizer and dairy plant licensing fees.

"It's a bare bones budget. Agriculture didn't ask for a lot in this budget. There was not a major initiative (for agriculture) in this budget."

Zimmerman said there was a great deal of sensitivity for farmers in light of last year's drought, but lawmakers also know that farmers have had a good couple of years and farm income is up in light of high commodity prices.

The Finance Committee made some modifications to the funds administered at DATCP. The Agricultural Chemical Management fund is one that is made up of money from fees on all pesticides, those purchased by consumers and homeowners as well as farmers.

Funding for the Discovery Farms program will now come out of that fund rather than the Agricultural Chemical Cleanup Program fund. The latter fund is made up of money from surcharges on fertilizer and pesticide from agriculture.

Generally the fund is supposed to be there to help pay for cleanups of agrichemical spills, but in many years the fund builds much more than there is demand for cleanup reimbursement.

The Finance Committee's actions were designed to align uses of funds with the source of revenue so demands on the cleanup fund - like support for Discovery Farms and animal health inspectors - were moved elsewhere and the surcharges to build the fund were reduced.

The committee's actions are aimed at eliminating the cleanup fund in the future.

One of its provisions was that any existing sites would still be eligible for cleanup funding, but any new mixing-loading sites that are built after this budget is signed would not be eligible.

Zimmerman said the committee's rationale was that as the engineering and design of these new sites becomes more sophisticated, the cleanup fund becomes less and less necessary and they hope one day the fund can be phased out altogether.

"Thirty years ago we didn't have mixing and loading sites."

Because they were reducing the demand for funds in the cleanup fund, lawmakers have proposed a 20 percent reduction in the fees and surcharges that go into this fund.


"Clearly one of the things Republican leaders on the committee were concerned about was the amount of borrowing in the governor's budget plan," he said.

The committee's plan, which will need to be voted on by the entire Legislature, reduced funding in the form of borrowing for the Stewardship Program and in the state's building commission projects.

Zimmerman said he hadn't yet determined how the reduction in what lawmakers call "bonding authority" - borrowing - would affect programs important to agriculture.

Those include Babcock Hall renovations and a Meat and Muscle laboratory at the University of Wisconsin-Madison as well as the Alliant Energy Center project that would help World Dairy Expo.

"We'll be checking to see how those projects are impacted," he said.

The state's Stewardship Program uses the state's bonding authority to borrow money to purchase lands that the state believes will be of use for recreation or conservation protection.

The program is often used to buy land that can be used for public access - things like boat launches and ramps - but has also been used to protect undeveloped land in places like the Wisconsin Dells area, where development pressure is great.

In recent years the program has purchased farmland and grasslands to use as pheasant habitat. One purchase of a farm was made along the Sheboygan River that included woods and cropland, he said.

Stewardship Program funding has been used to buy large tracts of forestland in northern Wisconsin too, where paper companies have decided they don't want to own woods anymore. Those purchases prevent the large woodland tracts from being subdivided.

The Stewardship Program is run through the Department of Natural Resources, but is a separate budget item from their normal operating budget.

The program began in 1990 with bonding authority of $20 million per year and rose as high as $100 million a number of years later. The theory of the program was that land could be protected at today's values and paid for with tomorrow's dollars, he said.

"Opponents of the program argue that we haven't paid stuff off. It's a credit card syndrome. But again, there is support for the program across many political lines and other groups."


Funding for the program had been proposed by Walker at $60 million per year. The Joint Finance proposal cuts the bonding authority to $47 million in the first year (a 20 percent cut) and $54 (a 15 percent cut) in the second year of the state budget.

Supporters and conservation advocates oppose those cuts, but Zimmerman said Farm Bureau has always had a concern about the borrowing and the purchase of more and more state land, especially when ag land is taken out of production and converted to recreational uses.

"As an organization we have always been concerned that the program is buying too much land."

Stewardship Program purchases are on top of County Forests and federal lands in the state and that begs the question of how much land does the government really need to own, he said. "We're okay with the cuts."

Zimmerman notes, however that the Stewardship Program has strong support from members of both parties and many conservation and sportsman's groups oppose those cuts.

When the program began to impact local property tax rolls years ago, lawmakers created a compromise that would keep local budgets intact as the state began to own more land in their jurisdiction. The DNR makes a payment to local municipalities in lieu of property taxes.

Zimmerman said these payments are based on use value taxation.

In the final days of their deliberations, Finance Committee members were scheduled to tackle health care programs, school vouchers and per pupil issues as well as income and sales taxes.

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