Farms facing increase in fees
New York's farmers will be hit hard by fee hikes while less money is poured toward vital programs and research now that the agricultural portion of the 2009-10 state budget is passed, agriculture leaders said Tuesday.
"Agriculture understands that we, along with everybody else, have to suffer the burden of trying to get the state back in shape," said Jay M. Matteson, Jefferson County's agricultural coordinator. "It's not so much the cuts. It's the fees that are going to be imposed that are going to be the knife in the back."
The $131.8 billion budget, which state legislators began voting on on Tuesday, includes a 506 percent increase in taxes on gas and electric utilities as well as a 50 percent increase in taxes on animal feed. The spending plan includes $21.034 million for agricultural programs, but that's a 25 percent decrease from last fiscal year's funding level.
It's the tax increases, including those on health insurance and small businesses, that have Mr. Matteson thinking of changing his approach.
"We've worked hard trying to attract farms into Northern New York through the Come Farm With Us program," he said. "I don't know if I could, in good conscience, encourage people to continue to move here given the current actions of our state government."
Peter Gregg, New York Farm Bureau spokesman, said the overall budget "is just terrible for business."
"They achieved nothing. They went backward," he said. "They increased fees. They increased taxes. They basically socked it to the business climate of New York, which makes it more difficult for our farmers to compete and stay in business."
Gas and electric companies will pay 2 percent of their gross revenue to the state, most of which would go to the general fund to reduce the budget deficit. A portion would be set aside to pay for regulatory oversight performed by the Public Service Commission. The current rate is 0.33 percent.
Travis Proulx, deputy press secretary for the Democratic Senate majority, said the 0.33 percent rate will be restored after five years.
Alberto Bianchetti, a National Grid spokesman, said the average homeowner will pay an extra $1.15 for electricity and $2.50 for natural gas per month. That figure assumes a consumption of 500 kilowatt-hours and 180 therms, he said.
Farmers are hardly typical consumers, Mr. Matteson noted.
"Dairy farms in Jefferson County, on average, spend $50,000 on their utilities per year," he said. "Any tax increase has a dramatic increase on them."
The tax on feed ingredients and commercial feed, which is paid by the business selling the supply, is increasing from 5 cents per ton to 10 cents per ton.
Both Mr. Matteson and Mr. Gregg believe the distributor will likely pass that cost to the buyer.
"That is literally nickel and diming our industry," the Farm Bureau spokesman said.
On the program side, Mr. Gregg said the Farm Bureau was pleased that a lot of the initiatives that were eliminated in Gov. David A. Paterson's proposal were partially restored by the Legislature.
And there was more positive news. The Northern New York Agricultural Development Program, which received nothing in the 2008-09 budget, is scheduled to receive $300,000 in the 2009-10 spending plan. Funds for prizes at county fairs, which the governor cut, were restored to the 2008-09 level: $453,000.
Mr. Gregg credited state Sen. Darrel J. Aubertine, who chairs the Senate Agricultural Committee, for securing more funding than the governor's proposal. The senator's office noted Tuesday that agriculture programs were receiving $6.27 million, or 43 percent more, than what Mr. Paterson originally proposed.
"No budget is perfect, but we're facing economic uncertainty in difficult times and this budget addresses the core needs in our agriculture programs," said Sen. Aubertine, D-Cape Vincent. "We've allocated more than $21 million focusing on the critical programs that help our farmers the most, seeking efficiencies and consolidations to make sure the vital needs of New Yorkers are met."
The New York Farm Viability Institute and its offspring, the Center for Dairy Excellence, are scheduled to receive $1.57 million and $374,000 less, respectively, in the 2009-10 budget than in the previous fiscal year.
Thomas N. Sleight, the institute's executive director, said the governor chipped away at his agency's funding this past fall.
"We're quite pleased that we're still hanging in there," he said. The 2009-10 funding, the director added, is "considerable support in pretty tough times."
Mr. Sleight said the institute would have to shelve some of its planned initiatives, but will move forward with offering dairy profit teams statewide.
