State Ag Funding Could Fall Over Fed’s 'Fiscal Cliff'

Federal fiscal cliff cuts plus recovery costs from Hurricane Sandy spells 'tough sledding' for state ag budgets.

Published on: Dec 5, 2012

State budgets for agricultural programs face tough sledding over the next two years, particularly in states with general fund deficits piling up. And it’s greatly complicated by the federal fiscal cliff, the possibility of tax sequestration, the farm bill being stuck in the federal quagmire. They all lend great uncertainty of federal dollars for many program support services.

That was the top line of what Julie Suarez, New York Farm Bureau’s director of public policy, told state ag leaders gathering last week in Syracuse, N.Y. Nowhere is the picture of tax revenues and spending more uncertain that in New York, New Jersey and Pennsylvania where the states face huge infrastructure issues due to Hurricane Sandy

FISCAL CLIFF ALREADY HURTING AG: Growing uncertainties over the federal fiscal cliff are already impacting state budget planners, says N.Y. Farm Bureau’s Julie Suarez, especially those trying to cope with massive infrastructure damage from Hurricane Sandy.
FISCAL CLIFF ALREADY HURTING AG: Growing uncertainties over the federal fiscal cliff are already impacting state budget planners, says N.Y. Farm Bureau’s Julie Suarez, especially those trying to cope with massive infrastructure damage from Hurricane Sandy.

At last count, the hurricane that slammed the Northeast coast resulted in more than $18 billion in losses in New York State, $13.7 billion in New Jersey and $4.1 billion in Pennsylvania. And those losses are still rising. It’s very uncertain just how much help the states, including Connecticut, Maryland and Rhode Island will get from the federal government, suggested Suarez.

Fiscal cliff ag impact
Suarez offered a long list of fiscal cliff impacts:

•The Bush tax cuts automatically expire
•Alternative minimum taxes kick in again
•Federal estate tax exemptions return to $1 million
•Emergency unemployment benefits end
•$984 billion in defense and non-defense budget cuts
•Unemployment may rise to 9.3% in 2013

The bottom line of Suarez’s report was that all of those factors, plus the yet-unknown farm bill impact could weigh heavily on state ag program funding, job creation and value-added research support, contended Suarez.