ByJeremy Griffith

State lawmakers on the House of Representatives Committee on Taxes met with resident, business people and farmers to talk about how the 1999 tax bill is affecting their livelihood.

Tuesday, November 30, 1999

State lawmakers on the House of Representatives Committee on Taxes met with resident, business people and farmers to talk about how the 1999 tax bill is affecting their livelihood.

Committee Chairman Ron Abrams said that the sales tax rebate, income tax reductions and property tax changes have helped farmers and local businesses. Next year’s tax bill will help a little and includes a 20 percent reduction in property taxes, Abrams said.

Don Yost, an area farmer, runs a large dairy and crop operation here along with his brother. He told legislators Monday that he was thankful for the help from the government in the form of tax rebates, but added that more needs to be done if family farms are to remain competitive with corporate farms.

&uot;My brother and I don’t want to make our living from the help we get from the government,&uot; Yost said. &uot;We appreciate what you’ve done already, but what we need are better prices for our commodities.&uot;

Yost said he has seen many of his neighborhood farmers give up and move back to the city to seek other work.

&uot;I hate to see what’s happening with the corporate farms moving in. My brother and I have been successful because we’ve diversified. But it’s tough,&uot; Yost said. Former farm laborers are highly sought after by other companies and corporate farms because of their experience working on heavy equipment and their willingness to work, Yost said. Farm laborers leaving the farm for better pay are not returning to the family farm business, he said.

According to report on agricultural assistance for fiscal 1999, farmers in a seven-county area surrounding Albert Lea received an average rebate of $759, for a total of $7,474,538. The money was dispersed by mail in the form of 9,846 checks. Some farms received more than one check. Farm rebates were capped at around $56,000.

Businessman John Hedlund of Albert Lea spoke to the committee and explained how Minnesota taxes affect his ability to compete locally and globally.

His business exports products to Europe, but he says his biggest competitor is across state lines.

Albert Lea and Austin are border cities, he explained, and businesses here have to compete with businesses in other states where the tax burden is lighter.

Mike Moore, vice-president of Minnesota Corrugated Box Inc., agreed. He told committee members Monday that the biggest drawback his company faces is difference in tax codes between states.

&uot;It might be more beneficial for a business here to relocate to another state. We don’t because there are other benefits to living and working here,&uot; Moore said. &uot;We live here and we like it here. We would just like to see a change.&uot;

Businesses in the state can qualify for a rebate on equipment and computers they purchase, but the process is cumbersome. Moore held up a three-quarter inch package of documents he and his staff used to file for the rebate. Abrams agreed that the process should be changed, possibly to resemble the simpler, single-page form farmers used this year to apply for their rebate checks, Abrams said.

In August, Minnesota residents received tax rebates for sales and property taxes based on their 1997 income levels. The rebates were calculated by the state Revenue Department using statistical data from surveys conducted by the federal government.

Approximately $1.3 billion in sales tax rebates were paid to over 2 million taxpayers as of Oct. 31. The average rebate was $646.

Income tax rate reductions will provide a tax reduction of approximately $1.2 billion for fiscal years 2000 and 2001, said Joel Michael of the House of Representatives Research Department Monday.