Brian Thalmann climbed down from his combine Tuesday afternoon for a quick photo op before starting in on a new field of corn. As he’d explained over the phone the day before while out harvesting, he’s working long days to make up for lost time.
Farmers are scrambling to harvest their crops, because of a late planting — after the April blizzard and a wet spring — and a cooler-than-normal fall that delayed crop maturity.
Once the harvest is complete, he’ll face another stressor: a lack of access to markets here and abroad that have brought sale prices down, even as farming costs continue to rise.
He’s counting on his family farm — currently a three-generation operation — to cover the costs of everything from equipment repairs to college tuition for his kids.
Thalmann is a past president/board chair of the Minnesota Corn Growers Association. His 2,000 acre farm, located in the Plato area, just west of the Carver County line, is responsible for covering a significant portion of a school building project in the Glencoe-Silver Lake Public Schools district, where voters approved a $24 million bond referendum in 2015. When it comes to bond referendums, property owners are taxed on each acre (unlike operating levies, which are confined to a house, a garage and one acre of land).
“I voted for the school bond,” he said, noting he anticipates he’ll have grandchildren attending the same schools his kids attended one day. “I felt I had to deal with the unfair tax situation.”
Fortunately, he says, state legislators implemented a new ag credit two years later that helped ease the property tax burden of bond referendums on farmers. Now he only has to foot 60 percent of his bill, with the state picking up the other 40 percent. And starting in 2020, he’ll see his share of that bill decrease even more.
In a bipartisan effort to ease the financial burden on farmers when communities pass bond referendums — and, in turn, increase the likelihood of ag communities passing school bonds — state lawmakers scaled up the Ag2School credit, as it’s been dubbed by supporters. The state will scale this credit up to 70 percent by 2023.
Some rural districts say they’re already seeing the impacts of these changes. Others are hopeful as they look ahead to Nov. 5, when over 30 districts across the state will be asking voters to approve bond referendums.
“It’s huge because there are so many districts that have over 70 percent of their value in the ag land,” says Fred Nolan, executive director of the Minnesota Rural Education Association (MREA). ”They couldn’t even have conversations about their school buildings — built in the 1800s or 1910, 1912 — because the farmers were going to foot so much of the bill they couldn’t even have a civic conversation.”
Some initial signs of impact
As rural administrators and education advocates, along with ag groups, lobbied to increase the Ag2School credit this past legislative session at the state Capitol, a number of rural districts went to voters with bond referendum requests.
Historically, rural voters have approved fewer bond questions than metro voters. And the pattern has continued in 2019. But some rural superintendents are certain this credit is helping to change the conversation in their communities.
For instance, in February, voters in the Russel-Tyler-Ruthton Public Schools district passed a $35 million bond referendum, by a wide margin, to build a new preK-12 school building in Tyler. The new building will replace three 80- to 100-year-old buildings that “have all outlived their service to the district,” says Superintendent Dave Marlette.
[image_caption]Superintendent Dave Marlette[/image_caption]
“My district is 87 percent farmers,” he said. “Basically, for every dollar that they were gonna pay in taxes this year, 40 percent of it is paid by the state. That’s a huge savings to each of my rural families. So it was a major player in us passing our bond referendum.”
He says folks from MREA came out to talk with farmers and other interested voters ahead of the special election — to explain how it worked and how there was a bipartisan effort under way at the Capitol to scale that credit up to 70 percent.
Farther north, in the Barnesville Public Schools district, voters approved a $24.5 million bond referendum in August for classrooms, security upgrades, a high school gym and other facility upgrades. The main request passed by a wide margin; and two smaller asks totaling a little over $3 million — for a walking track, additional auditorium seating and a connection between the high school and elementary school — passed as well.
Superintendent Jon Ellerbusch says two prior referendum attempts failed, before he joined the district in July. Notably, the initial ask was much larger. But even after the school board scaled back the scope of the building projects, members of the ag community — including three on the school board who hadn’t voted in support of that ask — thwarted a second vote.
This time around, Ellerbusch says, the referendum had the support of all seven board members, who were able to use their personal connections with the local ag community to raise awareness about the Ag2School credit gaining traction at the Capitol.
“I really do believe the reason there wasn’t a vocal ‘no’ group this time was because of the Ag2School credit,” he said, calling it “the greatest factor” in passing the main bond referendum earlier this year.
Ahead of the August referendum, one board member who farms told Ellerbush that the first vote for a $36 million referendum would have raised his tax bill by about $36,000 annually. With the ag credit in place — combined with a much smaller referendum amount — he’ll see that bill drop to about $6,000 a year.
Getting farmers on board
Rep. Paul Marquart, DFL-Dilworth, authored the bill that scales the Ag2School credit up to 70 percent by 2023. He teaches in the Dilworth-Glyndon-Felton Public Schools district, which is located along the state border, near Fargo.
[image_caption]State Rep. Paul Marquart[/image_caption]
“Even with the 70 percent [credit] … any increase for farmers at this time is tough. But it does help create more fairness for farmers,” Marquart said, noting he anticipates the credit will have “huge significance in covering the cost of a bond” in many rural districts seeking taxpayer-support facility upgrades.
Farmers may only make up a small segment of the voter population in these communities, he says, but folks living in town empathize with their financial situations and aren’t necessarily willing to outvote them.
Lindsey Leach, a member of the Dilworth-Glyndon-Felton school board, knows this dynamic well. Prior to joining the board, she participated in an ag-driven opposition that defeated the last bond referendum attempt in 2015.
‘We were less than 1 percent of the voting population,” she said. “But we sat together and thought: ‘How do we get info out?’ We put fliers out with facts and yard signs and went knocking on people’s doors.”
[image_caption]Lindsey Leach[/image_caption]
On Nov. 5, she and her fellow board members are now asking voters to approve a $31.4 million bond referendum to fund a number of renovations, including a new secure front entrance, new open spaces where students can work collaboratively and new science labs. And she anticipates that the Ag2School credit — combined with a community-driven plan designed to build more solidarity among the three consolidated communities — will offer farmers, like herself, enough relief to vote yes this time around.
Just the other day, she says, she drove by a farm and noticed a “vote yes” sign on the land. “I think that tells you where our community is at,” she said.
Other districts on the ballot
Even farther north, in the Ada-Borup School District, voters will be deciding the fate of a $9 million bond referendum on Nov. 5. The plan would expand upon secure front-entrance renovations already in the works with the support of a state grant, add elementary classrooms, add a new atrium leading to a multipurpose area and more.
With 86 percent of the district’s net tax capacity being ag land, says Aaron Cook — the district’s business manager who’s currently completing his licensure to become superintendent — the Ag2School credit will play a huge factor. In fact, $5.2 million of the $9 million bond would be covered by the state, through the Ag2School credit, he says.
“Honestly, if there was no Ag2School credit, whatsoever, we probably wouldn’t have looked at all, at [a bond referendum],” he said.
Sugar beet farmers in his district have been struggling with all of the rain this fall, he says. But with the word out about the Ag2School credit, he says he hasn’t seen any signs of a “vote no” campaign.
[image_credit]MinnPost photo by Erin Hinrichs[/image_credit][image_caption]In a bipartisan effort to ease the financial burden on farmers when communities pass bond referendums, state lawmakers scaled up the Ag2School credit, as it’s been dubbed by supporters.[/image_caption]
District leaders brought that amount down a bit — and broke out the athletic components into separate asks — after voters rejected a nearly $50 million bond referendum in May. Harvey says the attempt in May brought out a record number of voters, which he attributes to farmers who “were uncertain” about their crops after a late planting season.
This time around, he’s been very intentional about getting information about the Ag2School credit out to farmers, through community meetings.
“I believe it will be influential in this election,” he said. “I have to talked to some farmers who’ve said, ‘I voted no last time, but I’ll vote yes this time.’ The other answer I’ll get is: ‘I’m not as strongly opposed to it as before. I don’t know what I’ll do yet.’”
Speaking as an urban-dweller (I haven’t farmed in quite a long time), the tax break seems fair, and if it can get education funding issues passed in rural areas, it’s even better than that. It’s also a situation (one of several) wherein farmers, who like to think of themselves as being self-sufficient (and who are, to a greater degree than most city-dwellers, though not as much as many of them would like to think), ought to be aware that they and their communities are being subsidized by those of us living in the city, and specifically the Twin Cities, Rochester and Duluth, since that’s where the tax dollars that make up for their lower tax rate on farm land are coming from.
There’s no free lunch. I think it’s important enough to educate kids in rural areas that I’m willing to help pay for it with my state tax dollars. Now, if we could just get the legislature to do something about school funding inequities, both rural and urban…
There is no free lunch Ray but the lunches would be even higher without the great work done by farmers.
Just as the communities and schools in Greater MN rely on the ag community and vice versa, the metro gains from those communities in Greater MN that send people on a short term basis to enjoy entertainment and shopping opportunities in the metro. On a longer term basis, the metro gains from Greater MN when students travel for education, get jobs, and become part of the housing scene.
The state income tax rate is the same no matter where you live in MN. The tax dollars you speak of come at an equal rate from everywhere in the state, Greater MN is no different than the Twin Cities, Rochester, or Duluth in that respect. School funding formulas however are much more complicated and farmers were impacted by bonding referendums at a much higher rate than a homeowner in let’s say, St. Louis Park or Richfield.
Many schools in Greater MN were handicapped by that inequity and the rates of passage for school bonds in the metro vs. Greater MN bore out the inequity. Students, future employees for metro businesses, lose when that happens. Many small schools made do for as long as they could but the gaps increased every year.
There is currently a task force looking at school funding for the first time since 2001 and hopefully they will recognize other areas where ideas from long ago no longer fit the way our state works. Funding for schools should not depend on a vote every few years. Referendum roulette prevents school administrators from being able to use the current school funding in the most effective way because the revenue streams are not stable.
I would also like to state my appreciation for the work Erin Hinrichs did with article, representing the concept and the process in a very effective way.
I have served on state education boards ( both metro and in Greater MN ) for since the early 2000’s and there are clearly situations where legislation passed in St. Paul is not going to fit every situation across MN, both in the classroom and with the funding formulas that were designed to keep schools safe and effective. MREA worked to help illustrate one of those inequities and advocate for a solution that is working. It takes support from all over to keep our state moving in the right direction and everybody benefits when that happens.
“The tax dollars you speak of come at an equal rate from everywhere in the state, Greater MN is no different than the Twin Cities, Rochester, or Duluth in that respect.”
Um, no.
On their own, these rural hamlets cannot afford to update or replace their water treatment or sewage treatment facilities. The counties cannot maintain their roads without state aid.
Most of rural MN gets more tax dollars from the state than they pay in. It is a
myth that Jackson County is paying for Metro light rail. Hennepin, Ramsey, anoka, & Dakota Counties are net contributors to the state treasury.
Now, I’m good with this. We need each other. What we do not need is politicians that manufacture a rural/urban divide, pitting one part of MN against another. GOP candidates have campaigned on this, and far too many rural voters have bought into it.
The Metro is the economic engine of this state. If we think light rail will keep the engine running, let us build it. There are rural legislators that don’t even want to let us levy taxes on ourselves to build it. You may never ride it, just as I will not drive on a highway in Yellow Medicine. But the better the Metro engine is running, the more dollars there are to send to Pelican Rapids.
Mr. Phelan,
If you are going to use a quote from my comment, please include the context. “The state income tax rate is the same no matter where you live in MN. The tax dollars you speak of come at an equal rate from everywhere in the state, Greater MN is no different than the Twin Cities, Rochester, or Duluth in that respect.”
Speaking in scale, the metro would obviously provide a larger sum of tax dollars because they have more taxpayers but on a taxpayer basis, you pay the same rate of state income tax in the metro as I do in Greater MN.
Your opinion that the metro is subsidizing Greater MN fits your comfort zone but the economy in the metro depends on more people than just the metro to drive it. I would even go so far as venturing that is why metro businesses and higher education institutions advertise out here.
Greater MN has to deal with the laws that come from St. Paul and the school funding system is a mess. One aspect of it pitted the agricultural operations against their community school systems when it came to school building bonds. The people and organizations mentioned in the article came together to find a fix that is both fair and successful. The state constitution drives the need for equity in school funding, not whether someone thinks it is important to educate students in Greater MN or whether they are willing to “transfer wealth”.
Not sure when you left the farm but my experience in Greater MN and the farms that I work on convince me that it is important to keep an eye on geographical inequities that impact the education and farm economies and work for solutions.
I appreciate the work by Erin Hinrichs to report on an example.
Nope. Mr. Phelan had it right. And its not his opinion that the metro is subsidizing rural Minnesota – its objective fact. Its measured in tax receipts and expenditures.
And while I am ok with subsidizing rural areas – they would just die off without it – I am pretty tired of that not being recognized. Just like I’m tired of rural areas electing politicians focused on Muslims and immigrants and divisiveness in general. Focused on guns. Focused on telling the metro cities how to run themselves. Go elect some politicians interesting in addressing the failing economics of rural Minnesota.
Frankly, there appears to be an opinion that you and Mr. Phelan agree on, namely that there is a pipeline of metro dollars sending your wealth to rural hamlets that would die off without it.
The article is about the Ag2School legislation and the role referendums play in the current school funding landscape. Check out the numbers on school funding and you find there is no pipeline draining your wealth to preserve the rural hamlets from extinction.
The state has a responsibility to fund education for every student in the state and a funding formula was created to meet that responsibility. For many years it has lagged behind the cost of inflation, healthcare costs, and mounting mandates from the state. The result was an increase in referendums to make up for the shortage. Because of the way the formula for funding was designed by the state (I don’t believe this was intentional) farmers were being hit at a much high rate than average citizens like lawyers, teachers, or proprietors of main street businesses. There is an MPR article by Dan Gunderson that explains that aspect well.
A portion of your state taxes is used to pay for education. The tax rate is the same for every MN citizen. We may also pay additional local taxes for school referendums in place for your local school district.
Ag2School has shown to be successful legislation that helps correct an inequity within school funding. You can look at it as paying “extra” or you can look at it as having paid less for those years prior to Ag2School credit and the equalization to provide an equitable tax impact for farmers.
When the tax committee came to my classroom, we talked about the need to support Ag2School and it was a respectful conversation that didn’t use terms like “rural hamlet” or implied that survival depended on paying homage to the metro. I appreciated that approach and legislators also noted how they learned much by visiting our school and community when they came to hold their committee hearing. Minnpost actually has an article about the many positives that came out of that experience.
Similar to the visit by the tax committee, I would hold the majority of my conversations with metro colleagues to be equally respectful and open to learning that traveled both directions.
As for your dismay about not being recognized for “subsidizing” rural areas I would suggest you venture to those regions and find ways to enjoy your investment!
Lee, it’s simply a fact that metro taxpayers subsidize rural MN to the tune of $2 out of every $3 they get in State aid. And we’re not mentioning federal subsidies which add millions more.
You can say you “deserve” those subsidies, and they balance equity issues, but the most part you appreciate the fact that by-and-large metro liberals agree with you… we keep paying after all don’t we?
The problem on the horizon is the increasing divisive nature of rural mentalities that take these subsidies and then turn around and complain about metro priorities and “values”. We can all agree that rural education, opioid epidemics, mental health crises, transportation infrastructure, and poverty are legitimate issues. The problem arises when rural residents start complaining about “their” tax dollars paying for metro transit, education, and equity initiatives. When rural Republicans take metro tax dollars and then write budget that zero out any spending on Light Rail or bus services, your poking a bear you can’t afford to poke. You really need to recognize that fact because if you guys keep this up the day will come when metro voters aren’t so sanguine about picking up the tab for your tax bills.
This doesn’t happen very often, but I agree with every single word of Paul’s response. Could not have said it better myself.
Firstly, I am going to repeat that the vast majority of my conversations with people who spend most of their time in the metro are mature and respectful. i don’t get referred to as “Dude”, the city where I live is not referred to as a “rural hamlet” and there are no references to anyone from my neighborhood having an intent to “make war on metro liberals”.
I honestly don’t know where you get this stuff from but it is clear that you feel imposed upon.
My comments are connected to the article about a legislation called Ag2School credit. Having worked in education since the 80’s, lived in Greater MN communities from Oslo to St. James, and fortunate to claim a heritage that included growing up on a farm…I feel I have a good understanding of why this legislation came about and the impact it has had. Erin Hinrichs, the author, deserves credit for communicating this key points in effective fashion. In addition to writing skills, her sense of timing is strong.
Last night’s voting results showed an 84% success rate for referendums in Greater MN. That’s up from about 50% in recent years. That success supports the education for MN students as is outlined in the state constitution. If you think there are more tax dollars per student going to classrooms in Greater MN than the metro I would recommend a closer look at the facts. Many young people from Greater MN don’t stick around so if they end in the metro you are going to get better prepared employees, neighbors, and leaders within your community. I believe the legislators who supported Ag2School credit understood that connection.
If you have some other issues that bother you, go ahead and find the people responsible for them but your tax rate did not increase because of the Ag2School credit.
Currently, I leave my primary job and drive semi to haul corn for a farmer that I met two weeks ago. There is someone in the combine, another person driving a semi, a person in the grain cart, and I also might see his wife when she brings a grandchild to share some time in the combine. You are at the mercy of the weather this harvest so it is basically the only way they get to see their grandfather during this time.
Not one of these people complained about the taxes they pay or mentioned anything about the metro or the people in it. They are busy working and trying to do the best they can in a difficult situation.
Knowing what our state is about, I would bet that you would not have to travel far to see what I have seen. I hope you consider it.
More accurately,farmland is subsidizing the community. Farmland produces more revenue than it requires. Mp
Dude, if that were true we wouldn’t be subsidizing farms to the $20+ billion.
I’m not anti-farm but people need to realize that these farms we’re talking about aren’t actually producing our food. MN farmers make their money on exports, ethanol corn, and soy beans that never end up on our kitchen tables. The majority of food (with the exception of some dairy products) you see in the grocery store did not come in from rural MN. Our farm subsidies are NOT coming back to us in the form of the food on our tables. Whatever.
I’m not saying we should end the subsidies, but I’m not sure why we’re celebrating farmers who vote to pay for their children’s education? When did basic civic responsibility become an heroic gesture? And then we send them money so they don’t even have to pay (100%) for the schools they agreed to pay for?
Look, we get it, you don’t have the tax base to pay for your services… you’re welcome. Now quit complaining about MY values, and let’s move on.
By the way, we’ll note that while rural Republicans show up in St. Paul to make war on metro liberals, rural DFLer’s fight for necessary subsidies… yet rural MN is “Trump” country?
So MN taxpayers are subsiding farmers. Given the bulk of MN tax revenues come from the Metro, this is an urban to rural pipe line of dollars.
This is one MN, so I support this wealth transfer from me to the farmers of my state.
Now please don’t vote for politicians who favor local interference laws. Let us raise our minimum wage if we choose to.
The schools in rural mn would be in much better shape if farm policy did not drive so many farms and farm families from the land. The process continues, ever greater consolidation, ever fewer farmers and farm families, ever weaker communities and schools.
The belief that farming as it stands does so only because of subsidies from the city, is part of this failed farm policy that is so ruinous to farmers, community, and the land and waters. Go big, go corporate, go big finance or get out, is the mantra. This is not “just the way it is”, it is deliberate and it is systematic – but it doesn’t have to be.
If we want to do right by rural schools, we need to quit favoring corporations, banks, private equity, and the middle-men buyers of commodities, over farmers, rural communities, pollinators and the land and waters.
More metro area taxpayers need to realize that their tax dollars subsidize rural communities through Agricultural tax breaks, LGA, Rural Broadband Grants Program, etc. The “One Minnesota” tagline becomes less legitimate when you realize that there is One Metro area tax base paying for most of these subsidies.
It’s kind of weird to some of these comments about metro taxpayers draining their “wealth” on farmer’s behalf. It’s weird narrative that reveals how incoherent the conservative/libertarian mentality can be.
I don’t see metro taxpayers complaining about their “draining” reserves of wealth, we’re obviously sharing our wealth voluntarily. The conservative inability to wrap their heads around the reality of “shared” wealth distorts their world view to the point where they simply cannot abide reality. And then they go out and vote.
Anyone who owns and operates 2,000 acres is obligated to pay more for such things. Simply by owning that much land obliges you to make larger tax payments. Truth is, there should be four family farms per section. Many more young farmers would be able to get a start, and make a living, if there weren’t so many who were so greedy. Stop your whining.
No whining. Farmers are still paying a larger portion than homeowners and business owners and yes, the more acres you own the more you pay to support the school bond referendum. As reflected in the article, a bipartisan agreement (including legislators from the metro and Greater MN) brought forth legislation to create a more equitable tax impact for bond referendums.
If you think a farmer, young or old, can make a living to support a family on 160 acres, I would urge you to learn more about the present agricultural landscape.
As for greedy, I have witnessed an entire region of farmers stop their personal work to contribute to another farmer in need. I work a full time job and at night I am driving grain truck for the first time in 35 years because many farmers are trying to harvest the crop and there is a need for drivers. One day there was a need for a combine and another farmer helped out, another day there was a need for an additional truck. Once again, a neighboring farmer stepped up. Whoever is telling you about “greedy” farmers should accompany you when you venture out to learn more about the present agricultural landscape. What you will see is people working really hard to make their businesses work.
You also reserve the right to remain where you are and make judgements about people you have never met.
With rising costs and lower prices for their crops, the margin for profit is extremely tight. The tax credit from the Ag2School legislation goes straight to that margin.
Recently, success rates for building bonds ran about 90/55 in regards to a metro – Greater MN ratio. Yesterday’s voting ended up closer to 94/84. Not everything that comes out of the legislature leads to success. In this case, there is good reason to think they got it right this time.
Check your tax statement and see how much of an impact was incurred by the Ag2ASchool legislation. If it is harshly inequitable to others who benefit from the same outcome, we should talk as I know of a success story that might help you find relief.