Farm-size debate resurfaces in budget talks


(9/11/2019)

by CHRIS ROGERS

The Winona County Board may settle on a 4.3-percent tax levy increase for next year, but it won’t be a 5-0 vote. The county’s 2020 budget discussions got off to a harmonious start last month, when commissioner Steve Jacob — a fiscal conservative who normally opposes tax increases — joined fellow board members in praising county staff for keeping next year’s tax increase to just four percent. But yesterday, commissioner Marcia Ward spoke out against any tax increase, and Jacob made the county’s animal unit cap — a limit on farm size — the focus of debate, saying that while he generally supports the budget, he cannot support increasing taxes while limiting business growth.

“I would support a 4.31[-percent tax increase] if I had someone who was willing to take the shackles off the economy and talk about the animal unit cap,” Jacob said.

He did not get any takers aside from fellow conservative Ward.

Now the County Board appears poised for a familiar 3-2 split vote to raise next year’s taxes. That is OK, commissioner Greg Olson said. “I’ll carry the water for you on the 4.31-percent [tax increase],” Olson told Jacob.

The animal unit cap is a county ordinance that limits livestock farm size to no more than 1,500 animal units (1,071 cows). It has been debated for years by citizens who feel it unfairly restricts farm growth and those who feel it safeguards against water pollution and helps small farms by limiting farm consolidation. Rural commissioners Jacob and Ward want to eliminate the cap; Winona-based commissioners Greg Olson, Marie Kovecsi, and Chris Meyer have defended it.

The county’s proposed $51.6-million 2020 budget includes some new funding for staff positions — for new courthouse security deputy positions and for a jail intake worker, who has helped minimize the local jail population — and for some capital investments, including proposed body cameras for the sheriff’s office and a new roof for a county building. Otherwise, it is largely a status-quo budget, with most of the spending increases caused by things out of the county’s control, such as union wage contracts and the cost of providing state-mandated social services, county administrator Ken Fritz said. The 4.3-percent increase would raise Winona County’s property tax levy by $838,000 and bring it up to a total of $20.3 million.

Tuesday’s budget discussion turned to the county’s economy at-large because Meyer had requested information on the county’s tax-base growth. In her election campaign last year, Meyer argued that Winona County could fund important services while minimizing the tax burden by building the county’s tax base. The county’s tax levy is a dollar amount — $20 million — that is spread out over all of the taxable property in the county — all $5 billion of it. If new building construction expands the tax base faster than levies are going up, taxpayers can actually pay less because the levy is spread out over more taxpayers. That is not happening in Winona County, at least not yet. Winona County’s tax base will increase by six percent next year, but most of that growth comes from inflation — from the property values rising on existing properties. New construction only expanded next year’s tax base by 0.7 percent. The good news is that there is a construction boom in Winona right now that will go on the tax rolls in 2021 and beyond, Winona County Assessor Steve Hacken said. The bad news is that new construction will not do much to soften the proposed 2020 tax hike.

The animal unit cap is not helping Winona County’s tax base grow, Jacob argued. “For us to be throttling down our agriculture industry makes as much sense for Winona County as what it would make for Olmsted County to say, ‘You can only have 3,000 patients [at a medical center] and you’re done.’ So to me we need to take the brakes off our economy and let it hit on all eight cylinders instead of throttling it down. It’s either that or taxing the existing taxpayers more. To me, those are the options.”

“If [farmers] build new barns, that’s more tax capacity,” Ward stated.

There are lots of issues that affect the farm economy — from trade wars to commodity prices — Kovecsi said. The county does not know how much of an impact the animal unit cap has, she stated. “It’s an unknown,” she added. Kovesci has voted against proposals to study the issue.

Animal agriculture only makes up a small portion of the county’s economy, Meyer said, citing estimates of the county’s gross domestic product. She noted that — largely because farmland is taxed at a much lower rate than commercial and industrial properties — the city of Winona’s tax capacity exceeds all of the county’s rural townships combined. “I just don’t see the data to really support that single issue as holding the economic significance that you think it does,” she told Jacob, referring to the animal unit cap.

Allowing large farms to expand would have a significant affect on Winona County’s economy and tax base, Jacob asserted. “What I don’t think you [understand] is that it’s a double penalty to the taxpayer when we say we’re going to do all of this [government spending] and at the same time we’re not going to free up the economy,” he stated.

“So you’re holding these funds hostage, basically?” Kovecsi asked Jacob, referring to tax-funded programs.

“Whoa, whoa, whoa, let’s go back to the issue at hand,” Fritz jumped in. “We’ve got to get a budget passed.”

When it came down to the specifics of the budget, Jacob and Ward said they were willing to reduce county funding for outside organizations such as the Southern Minnesota Initiative Fund (SMIF), Project FINE, the Soil and Water Conservation District, local libraries, and others, while Meyer, Kovecsi, and Olson were not.

At $647,000, cutting all of the funding for outside agencies still would not fix the county’s $837,000 deficit or eliminate the need to raise taxes, and the services these agencies provide are valuable, Meyer countered. “What SMIF is doing is exactly what we need to be doing to address workforce issues,” she said, referring to the foundation’s investments in economic development and education.

“I think the fact that we did not honor everyone’s requests for increases is already a cut,” Kovecsi stated, referring to the fact the proposed budget would not give the outside agencies funding increases they requested. Olson echoed, “I would agree that keeping them the same would be essentially a reduction.”

The county keeps asking for more money from taxpayers, some of whom do not have more to give and will have to make choices between buying computers for their kids or paying their taxes, Ward argued. She indicated she would oppose the levy increase.

Jacob praised the budget at yesterday’s meeting, saying, “I feel like the budget is the most refined in the seven years I’ve been in office. I feel like our departments have been squeezed as much as they can be squeezed.” However, Jacob stated he did not want to raise taxes while restricting economic growth and made his unsuccessful overture to support the tax increase if the County Board would consider changing the animal cap.

In an interview, Olson explained what he meant by carrying the water for Jacob. “I’ll be the bad guy and vote for the levy increase that will allow our county to operate,” Olson said. “I’m not going to play these Washington, D.C., games by compromising my opinion on something we shouldn’t even be discussing.” Olson added, “His compromise today was not a solution to the budget, it was just a — ‘you agree with me on this, and then I’ll vote for the budget.’ Maybe that’s the way big government works, but I don’t want that here in Winona County.”

“I’m being straightforward with you. That’s where I’m at,” Jacob responded to Olson’s “carry the water” comment. “It’s not about carrying the water. I can’t support even 4.31 [percent] without letting our economy grow.”

The County Board’s last discussion of the animal unit cap was scuttled by Winona County Attorney Karin Sonneman’s legal advice that discussing the animal unit cap in general could lead to discussion about a pending lawsuit and compromise the county’s legal position. The Daley Farm of Lewiston is currently suing the county over denying its request for an exception from the animal unit cap, and Sonneman has advised the board to steer clear of the issue entirely. Jacob and Ward have said that the animal unit cap is an important issue that affects other farms and the County Board needs to talk about it. “I’m uncomfortable with every conversation having to turn to a conversation about the animal unit cap,” Meyer said yesterday.

Asked if bringing up the animal unit cap was putting the county in legal risk, Jacob said that he received legal advice that he could talk about the animal unit cap as a policy, just not the specific lawsuit. The County Board had recently met in closed session with its attorney in the Daley case, Paul Reuvers. Jacob argued that the commissioners who are opposed to changing the animal unit cap are using the lawsuit to shut down discussion about the cap.

In an interview, Olson said that the County Board had been advised by its attorneys not to discuss the animal unit cap in general, as well as the Daley case specifically.

Chris@winonapost.com

 

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