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Rand, Broecker discuss issues

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Both support tax-exempt status for ag producers

By BRAD BOWMAN

Landmark News Service

NEW CASTLE, Ky. – 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.

During a recent candidate form hosted by the Farm Bureau, both candidates  agreed that, if elected, they would not 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.

“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 4 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 andrevenue 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 regard 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 costs that go into their products.

Henderson warned removing sales-tax exemptions would result in a 6 percent increase in production and would destroy agriculture business here, 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 away from tobacco for farmers throughout the state, Kentucky has become the largest beef producer east of the Mississippi at eighth in the country, Rand said. These are the types of things farmers can invest in with relief money for improving their farms.

Broecker admitted he has 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.”

With regard to the tobacco relief fund and HB 611, Broecker stressed that the farming community must 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 standpoint the industry has changed. Business has changed, and farming has changed.”

Broecker said the agriculture industry must push forward, because farmers are no longer growing tobacco. He cited industrial hemp as a viable crop that could easily be grown on 5 acres, and a biodiesel company in Owensboro that, if it proves 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 general funds. 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 reminded them that the settlement amount is reduced every year.

“The money comes in via a formula, and part of that formula is production, smoking and rates.”

In the beginning, the settlement was at $120 million a year; today, it is in [the $90 million to $100 million range, he said.

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 childhood 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.

For more information about Broecker, visit his website at TKBroecker.com; for information about Rand, visit RickRand.com.