HARRISBURG, Pa. — Like every budget proposal, Pa. Gov. Ed Rendell’s proposed fiscal year 2008-2009 state budget is a good news-bad news budget.
It restores critical funding to help farmers acquire crop insurance, but continues the trend of funding cuts that impact agriculture.
“Proposed funding for several key programs that directly reaches farmers and their fields have been cut for the second year in a row,” said Pennsylvania Farm Bureau President Carl T. Shaffer.
The proposed 2008-09 general fund budget is $28.3 billion, an increase of 4.2 percent over 2007-08. It reduces spending by 2.1 percent in all areas of the budget other than education, public welfare, corrections and probation and parole.
Good news
The governor’s budget plan does respond to one top concern of Farm Bureau by restoring $1.5 million in support for crop insurance, taking it to the $3 million level of two years ago.
Bad news
However, the budget proposal recommends reductions to state conservation districts, cuts to the Ag Excellence Programs and reductions in agriculture research administered by the Pennsylvania Department of Agriculture.
“Pennsylvania needs to maintain its investment in agriculture so it can continue to benefit consumers and the state economy, while ensuring we don’t fall behind other states,” Schaffer said.
Conservation picture
Conservation districts face a reduction in funding of 33 percent over the past two years, or $950,000 from last year’s final appropriation.
These districts help provide farmers with needed technical assistance in meeting increased regulatory burdens imposed on agriculture and in helping farmers meet nutrient and sediment reduction goals in the Chesapeake Bay.
The Pennsylvania Association of Conservation Districts joined the Pa. Farm Bureau in expressing disappointment and frustration over the soil and water conservation funding cuts.
Susan Marquart, association executive director, said the districts are being asked to do more with less, as they expand their technical assistance into biofuel and alternative energy production arenas while also protecting soil, water, and air resources.
In addition, funding remains stagnant for the Nutrient Management Fund, which provides technical assistance to farmers through loans, loan guarantees and grants to help implement environmental measures. The governor’s budget proposal does not increase the fund, currently at $3.28 million.
More ag cuts
Pennsylvania’s Ag Excellence Programs, such as the Center for Dairy Excellence, might also receive a 30 percent reduction in funding from the 2006-2007 budget. And a 30 percent cut is proposed in the agricultural research budget for the department of agriculture, compared to two years ago.
In addition, Penn State University faces proposed cuts of more than $500,000 in agricultural research and nearly $600,000 in agricultural extension appropriations compared to last year.
Cabinet backs governor
Despite the complaints, the Rendell administration’s top ag man says the budget proposal is a good thing.
The proposed budget increases general funding for the state department of agriculture by $2.2 million.
“Gov. Rendell’s budget will help protect our farmers from natural disaster and enhance our rural economy with a strong investment in renewable energy, benefiting our farmers and the businesses that support them,” said Agriculture Secretary Dennis Wolff.
Renewable fuels
Rendell’s proposal promotes the production of renewable fuels through the PennSecurity Fuels Initiative, which calls for the production and use of 1 billion gallons of biofuels in the state.
Wolff said Pennsylvania spends $30 billion annually on liquid fuels produced beyond the state’s borders.
“Bringing new fuel industries, particularly ethanol production, to rural communities will benefit a host of industries, from the farmers who produce the raw materials to the transportation companies that will bring biofuels to the rest of the state,” Wolff said.
The Governor’s Energy Independence Strategy would require every gallon of gasoline sold in Pennsylvania to include 10 percent ethanol once in-state production reaches 200 million gallons per year, with incremental increases up to 20 percent once annual production reaches 300 million gallons.
Farmland preservation, tourism
Pennsylvania’s nation-leading farmland preservation program will continue its commitment to preserving the state’s agricultural resources with a $30 million investment. The program is expected to reach 400,000 acres of preserved farmland this year.
The state will also continue investing in agricultural projects through the First Industries Fund, a grant and loan program aimed at strengthening Pennsylvania’s agriculture and tourism industries.
Of the original $100 million for agricultural projects, approximately $25 million is still available.
Other proposals
In his address to a joint session of the legislature, Rendell said that before budget deliberations begin, taxpayers deserve immediate action on programs to help weather any economic downturn, including:
- The immediate approval of tax rebates of up to $400 for 475,000 lower-income taxpayers;
- Putting Pennsylvanians to work on more than $1.5 billion worth of shovel-ready projects with prompt enactment of $750 million in new capital spending; and
- The enactment of the Energy Independence Strategy.
The budget debate now moves to the Pa. General Assembly for the final 2008/2009 general fund budget.
