LINCOLN — Gov. Pete Ricketts backed away Wednesday from a proposal to repeal Nebraska’s potato tax.
The governor’s response came after his bill got hashed, mashed and julienned by the very people who make a living growing spuds.
Potato producers and shippers told members of the Nebraska Legislature’s Agriculture Committee on Tuesday that they want to keep a state excise tax paid by members of their industry. They also said they were not consulted about Legislative Bill 348 before it was introduced on behalf of Ricketts as a part of a broader effort to reduce unnecessary governmental regulations.
The tax amounts to one cent per 100 pounds of potatoes produced, packaged or shipped by the 15 or so commercial growers in Nebraska. It raises about $75,000 per year, which potato producers use to help fund research or promote their products.
“We heard about this about 10 days ago,” said James Allen, general manager of Western Potatoes in Alliance. “How does this happen?”
Taylor Gage, the governor’s spokesman, said Wednesday that Ricketts respects the wishes of potato producers, which were made clear at the Ag Committee hearing.
“At the time the bill was introduced, it was the administration’s understanding that the potato shippers no longer valued the checkoff because the proceeds from this tax had not been utilized for several years,” Gage said.
Ending the spud tax is part of a package of bills the governor supports to eliminate or reduce occupational licensing in the state. Ricketts has argued some of the licenses create regulatory barriers for employment or upward mobility in the state.
The potato bill, sponsored by Sen. Tyson Larson of O’Neill, also would eliminate a license required of potato shippers in Nebraska. Other bills introduced at the governor’s request would eliminate state licenses for car salespeople and school bus drivers.
The Governor’s Office has been working with the Platte Institute for Economic Research on the occupational licensing issue.
Adam Weinberg, spokesman for the Platte Institute, said the proposal regarding potato shippers was recommended by the Nebraska Department of Agriculture. He said it emerged as a candidate for elimination, in part, because only Nebraska and Michigan require such licenses.
The Ag Department zeroed in on the potato shipper regulations after noticing that about $200,000 had accumulated in the account that holds revenues from the tax.
Joseph Thompson, owner of Thompson Seed Potatoes in Alliance, said an industry council that oversees the fund had been saving the money, perhaps to pay for a research study to benefit all producers. At any rate, the fund was not being ignored, he said.
The bill calls for directing the unused potato tax money to the state’s general fund.
“I think this is a grab for funds,” Thompson said. “That’s what this is all about.”
Several state senators who serve on the Ag Committee were critical of the bill during floor debate Wednesday.
Sen. Bob Krist of Omaha criticized Ricketts, the Platte Institute and the State Department of Agriculture.
“Funny thing, they didn’t talk to the farmers. They didn’t talk to the shippers. Everyone was dumbfounded they didn’t talk to them,” Krist said.
Sen. Carol Blood of Bellevue was struck by how the farmers disputed the reasons given by the Platte Institute to eliminate the excise tax. They do not consider the tax or the licensing requirements a burden, she said.
“We were misled,” she said of the bill’s proponents.
Sen. Lydia Brasch of Bancroft, chairwoman of the Ag Committee, said she doesn’t fault the Ag Department or the Governor’s Office for not knowing the views of potato producers. She noted that the purpose of a public hearing, which all bills receive in Nebraska, is to learn the range of opinions on proposed legislation.
Nonetheless, she said she doubts that the bill has the votes to advance from the committee to the floor.