A proposal to repeal the landmark two-year-old repeal of sales tax on farm equipment and diesel fuel for agriculture and use the money to bolster farm worker health insurance is nothing more than a ploy to raise money to balance the state budget, according to agriculturists.
A coalition of Democrats led by California Assembly Speaker Herb Wesson from the Los Angeles area joined with the United Farmworkers of America and the California Medical Association in announcing that they want to revoke the $80-$100 million in annual agricultural tax breaks, redirecting the funds for income tax breaks for farmers in providing health care to farm workers.
“This is not about providing health care for farm workers,” said Jeff Huckins, a Woodland, Calif. farmer and first vice president of the Far West Equipment Dealers Association. “It is the farthest thing from it. This is all about taking money away from farmers and putting it into the general fund to make up for the budget shortfall.”
Claim for repeal
Giving a tax credit for health insurance will not encourage farmers or anyone in agriculture to buy health insurance for workers, said Huckins.
Backers of the tax repeal claim thousands of farm workers do not have health insurance. Grower organizations dispute the findings of a study done by an organization called California Endowment.
For example, Mike Webb, a lobbyist for Western Growers Association, said the majority of WGA's 3,500 members provide health care for workers.
“If these legislators are so worried about health care for farm workers then they should start doing something about the workers compensation program in California,” said Huckins. “It is a disaster. Workers comp costs have become so high farmers are reducing health care for workers to pay workers comp premiums.
“This is political gamesmanship by people who refuse to address the serious fiscal crisis we have in this state,” said Huckins.
Earl Williams, president of the California Cotton Ginners and Growers Associations, said the coalition of farm organization that won the tax break will fight just as hard to retain it.
“This is an unbelievable move in unbelievable time,” said Williams “The state is down and out economically, and now these people are trying to further penalize employers and businesses. It doesn't make any sense.”
“How can you talk about health care for farm workers when legislation like this will result in no farms,” Williams said. “Farmers do not go for this kind of stuff…tax breaks for worker health care. The pitiful thing about this is that a good percentage of farm workers are covered.”
Face budget crisis
Huckins said if the Democratic leadership is serious about addressing the budget crisis, “they should face it head on and deal with spending. Repealing the tractor tax does not address the budget, and it will not provide health care for farm workers who do not have it.”
The bill to repeal the tax relief is co-written by the assembly speaker and another Democratic Los Angeles assemblyman, Marco Firebaugh. Under the proposal growers would be able to claim tax credits if they pay at least 75 percent of the premiums on qualified health plans.
Revoking the tractor tax breaks, according to Webb, would only drive up costs for farmers.
“Here's another thing that Sacramento is doing that's going to make it more difficult for farmers,” Webb said. “Many of those people who cannot provide health insurance are the small- and medium-size growers who are struggling to stay afloat.”
Farm leaders say this is a attempt to increase taxes without the two-thirds majority it would take to get new money from the state treasury. The bill, AB 923, would require only a majority vote, making it make it more difficult for opponents to block it.