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Published April 23, 2009, 11:39 AM

Veterans gain, farmers cut in budget bill

The Minnesota House would give veterans programs more money, but delay or eliminate some agriculture spending.

By: By Don Davis, State Capitol Bureau, The Osakis Review

ST. PAUL -- The Minnesota House would give veterans programs more money, but delay or eliminate some agriculture spending.

But for some representatives, neither got enough money in a Wednesday 83-49 mostly party-line vote, with Democrats in favor and Republicans opposed.

"We are willing to fund dog parks and trails and hockey arenas," Rep. Rod Hamilton, R-Mountain Lake, said. "Where is our priority?"

Rep. Al Juhnke, DFL-Willmar, said his committee did the best it could to fund agriculture and veterans' programs, given the state's budget deficit.

The ag bill continues many programs with few cuts, including protecting the food supply, he said.

"We took care of food safety," said Juhnke, chairman of the committee that produced the bill.

Overall, however, Rep. Doug Magnus, R-Slayton, said the bill does not reflect the state's priorities. "It's a sad day in Minnesota."

Veterans' programs receive 3 percent more money in the House bill while military programs jump 7.7 percent, mostly for re-enlistment bonuses.

The state Agriculture Department budget would be chopped 8.3 percent, with much of the money coming from delaying for the second time payments made to ethanol producers. Without ethanol cuts, the ag department's hit would be just 1.25 percent.

Some agriculture programs are cut and some ag money is moved to veterans' programs under the bill.

The vets-ag bill was the first of a dozen budget measures representatives are debating this week. Together, they produce a budget for the next two years.

Senators are holding the same debates, with House-Senate conference committees scheduled to begin meeting next week to negotiate differences between similar bills. Then, they go to Gov. Tim Pawlenty for his signature or veto.

The state budget would be $6.4 billion in the red if not for a combination of an influx of federal economic stimulus money, program cuts and new revenues, such as income tax increases the House and Senate are considering.

In many ways, the House ag-vets bill roughly mirrors a Senate-passed version in giving more money to veterans' programs while cutting ag.

Included in the House plan is a provision to delay $6 million in ethanol producer payments, originally set up to encourage corn farmers to invest in ethanol fuel production. Much of that money already is past due to the ethanol producers after a 2003 law change delayed payments to help manage a previous state budget problem.

An effort by Rep. Michael Paymar, DFL-St. Paul, to eliminate all ethanol payments was defeated 81-49.

"It was a well intended program to help rural Minnesota, to help farmers, but I feel the time for subsidies for the ethanol industry should come to an end," Paymar said.

Paymar said ethanol plants now are making good profits.

However, Juhnke said that the state should fulfill its promise. Rep. Dean Urdahl, R-Grove City, agreed.

"This is about commitment and fairness," Urdahl said.

The House accepted a provision to post all ethanol payments to a Web site so the public knows who gets the money.

The Crookston-based Agricultural Utilization and Research Institute is cut 7.6 percent in the House bill, not the 50 percent Pawlenty proposed.

The bill also classifies horses as livestock, but would not give them tax breaks received by other livestock producers. Rep. Tom Emmer, R-Delano, tried to get horse producers the same tax benefits, but that failed 74-57.

The Department of Natural Resources would be given authority to kill or capture escaped animals such as pigs.

In the veterans' portion of the measure, funding is cut 4.5 percent, but Juhnke said veterans' programs are not hurt. Juhnke said most of the cut comes from the Minnesota GI bill, which no longer is as important as in past years because Congress has stepped up its funding for the issue.

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