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Legislators, ag commissioner discuss state budget impact on agriculture

WILLMAR -- Local legislators agree that the state's budget crisis, with a $5 billion deficit over the next two years, is challenging because there is no way to know when the state will reach the bottom of the money troubles.

"That's one of the biggest problems we see, is (that) we can't see the bottom of the trough," said Rep. Al Juhnke, DFL-Willmar.

Sen. Joe Gimse, R-Willmar, a-greed, noting that the state usually has a growing economy. "This time, it is not so, we have growing unemployment," he said.

The legislators were speaking Friday in Willmar at the seventh annual Strategic Animal Ag Conference. Their suggestions on how the state Legislature will deal with the budget issues diverged quickly.

"The answer, the key, is to create jobs," Gimse said. "When we see folks going back to work, we will be coming out of it."

Juhnke expects a three-pronged approach, including an infusion of federal money, cost savings and revenue increases. Those cost savings are going to come from old-fashioned belt-tightening, plus a thorough examination of state departments, like the Department of Agriculture, to review what the department should look like.

As for revenue, Juhnke reviewed several examples in the past 20-plus years when governors used income tax surcharges, the state sales tax and Gov. Tim Pawlenty's cigarette tax to balance budget deficits.

"We've never solved this type of thing without some revenue from somewhere," Juhnke said.

Juhnke expects to push for the governor's suggestion of $50 million in business tax cuts to go proportionally to agriculture.

Twenty percent of the state's economy, and 40 percent of western Minnesota's economy, is agriculture. "I'm going to insist that 20 percent of that money go to agriculture," Juhnke said. "I will insist on it. How far it will go, we will see."

Agriculture officials need to push the Legislature to fund the livestock investment grants, which may be a challenge, according to Gene Hugoson, agriculture commissioner.

"With the state's budget problems, it's going to be very difficult to repeat that program," he said.

Last year, the Minnesota Department of Agriculture received applications that represented $150 million of livestock projects seeking a portion of the $1 million in grant money allocated last year.

Juhnke, who is chairman of the House agriculture, rural economics and veterans affairs finance committee, agreed that the grants should be funded. "Those are jobs on the ground," he said. The farmers buy the materials they need locally, use local contractors to install them and have a significant local impact.