New State Budget’s Impact on Agriculture
Published on June 2 2021 9:10 am
Last Updated on June 2 2021 9:11 am
BY KAY SHIPMAN, FARMWEEK
State lawmakers early Tuesday morning passed a fiscal year 2022 budget with about $42.2 billion in general revenue funds and $2.5 billion in federal American Rescue Plan Act (ARPA) dollars.
The vote was 37-21 in the Senate and 72-44 in the House with a single present vote.
The new budget maintains funding levels for the Illinois Department of Agriculture (IDOA) and agriculture programs and services. It also fully funds the state K-12 education evidence-based funding formula that provides additional funding to districts most in need without reducing other districts’ funding when additional revenue becomes available. And the new budget does not reduce local governments’ share of state revenues or rely on borrowing among state funds to pay obligations.
Originally, the state was to receive about $7.5 billion in federal ARPA funds, but that was increased to $8.1 billion. While $2.5 billion was included in the new state budget, the remaining will be spent after legislative action in fiscal years 2023 through 2025, according to Kevin Semlow, Illinois Farm Bureau director of state legislation.
“We knew the General Assembly would be faced with some very tough choices, but they were able to postpone many of those because of one-time federal dollars,” Semlow said.
The approved budget, if signed by Pritzker, will:
- Eliminate accelerated depreciation allowed under the Federal Tax Cut and Jobs Act. This allowed a business to take 100% depreciation deduction in the year of purchase for qualifying assets;
- Cap the Corporate Net Operating Loss (NOL) Deduction at $100,000 per year, capping the amount a business can carry forward its NOL to future years;
- Align treatment of foreign source dividends with treatment of domestic source dividends. Corporations had been allowed to deduct foreign source dividends at 100% and global intangible low-taxed income at 50%; and
- Stop the phase out of the Corporate Franchise Tax.
Semlow noted the new budget would repay the state’s federal short-term borrowing early and pay back state interfund borrowing from previous years, totaling $3 billion in debt. The budget also allows the state to prepay Medicaid payments, using higher matching funds from the federal government.
The General Assembly also budgeted $9.2 billion for K-12 education, $1.9 billion for higher education, $1.9 billion for public safety, $7.5 billion for human services and $1.4 billion for general operations.
IDOA’s budget includes $18.18 million in general revenue funds, $13.9 million in federal funds and $93.073 million in other state funds. Those levels fund IDOA’s essential work, including administering the Livestock Management Facilities Act and the Pesticide Act.
However, funding increased significantly for Soil and Water Conservation Districts (SWCDs) and a cover crop incentive program. SWCDs’ operations budget increased by $4 million and a new Nutrient Loss Reduction Strategy (NLRS) line item received $3.5 million.
Grant Hammer, executive director of the Association of Illinois Soil and Water Conservation Districts, said a conservation coalition worked to prevent a June 30 sunset of the Partners for Conservation Fund and to obtain dedicated funding for the NLRS.
With state dollars dedicated to implement the NRLS, “it will help accelerate the program toward our goals,” Hammer said.
Funding for IDOA’s cover crop incentive program more than doubled to $660,000. The program offers a crop insurance premium discount for enrolled acres, and farmer interest has far outstripped available enrollment.
Meanwhile, county fair funding remained steady at $900,000 for fair and exposition authorities; $1.3 million for fair rehabilitation; and more than $1.8 million for fair and agricultural societies.
University of Illinois Extension funding, which passes through IDOA’s budget, received level funding of nearly $11 million; Cook County Extension of about $2.5 million; and agriculture Extension 4-H of $786,000. The line item for agricultural education again received $5 million in the budget.
News,Region: Effingham,Region: Central
via Welcome to the X Radio – Effingham’s News and Sports Leader, 979XFM and KJ Country 102.3 https://ift.tt/2JQxGvW
June 2, 2021 at 09:30AM