Missourinet

Your source for Missouri News and Sports

You are here: Home / Archives for Ethanol

State Audits Question Value of Agriculture Tax Credits

By Leave a Comment

State audits question the value of two agriculture tax credits, while supporters claim they spawn significant economic activity in rural Missouri. State lawmakers now must sort through the data and decide their worth.

State auditors say the New Generation Cooperative Incentive Tax Credit, used mainly for ethanol plants, will lose $37 million and create only 12 permanent jobs.  They say the Agricultural Products Utilization Contributor Tax Credit will lose $13 ½ million, creating only 5 jobs.

Auditor Jon Halwes tells the Joint Committee on Tax Policy there’s at least one bright spot; that the two credits target rural Missouri, an area in need of economic activity.

In fact, both audits acknowledge they are unable to measure the social benefits of the tax credits that are aimed at rural communities. Halwes says those benefits might be enough to lead lawmakers to renew the credits once they sunset in 2010.

The audit of the New Generation Cooperative Incentive Tax Credit Program estimates the economic activity generated by the business investment would create $2 million in net revenue. It says that would be wiped out once projected tax credit redemptions of $39.1 million are considered, turning a $2 million net into a $37.1 million loss. Employment growth from the tax credit, according to the audit, would peak at the 96 new jobs created in 2006. It projects only 57 of those jobs would remain when the credit sunsets in 2010 and that by 2020, all but 12 of those jobs would be lost.

It gives a similarly bleak assessment of the smaller Agricultural Products Utilization Contributor Tax Credit Program . The state audits conclude that neither creates enough economic activity to offset the tax credits used.

Committee members openly questioned the value of the two credits. They say more study is needed to determine whether they are worth it.

The Missouri Agricultural and Small Business Development Authority administers the tax credits. Executive Director Tony Stafford defends them, insisting that the State Auditor uses an economic model that doesn’t reflect modern value-added agriculture. The authority claims the model used by the State Auditor is biased against agriculture.

A University of Missouri Extension, Commercial Agriculture Program study indicates the tax credits have spawned $10 million in economic activity in rural Missouri. One of its authors’s, Vern Pierce, says it is not that the two studies take different tones; it is that they are totally different studies. The university study says the Missouri Value Added Program contributed $9.8 million in grant funding the past seven years to rural projects. Those projects, according to the study, generated $17.9 million in gross economic activity. It concludes that value added agriculture, spurred by tax credits, has created an economic ripple effect that created 186 jobs and added $10.7 million to the state economy.

Download/listen Brent Martin reports (:70 MP3)

Blunt Promotes Ag Initiatives at State Fair

By Leave a Comment

Governor Matt Blunt (R-MO) takes advantage of a visit to the State Fair in Sedalia to take the keys to an E85 vehicle and to talk up a couple of proposals designed to benefit agriculture. 

Blunt has added a new Ford E85 Escape Hybrid, one of only 20 combination hybrid and renewable fuel vehicles in the nation, to the state’s fleet of vehicles. The Governor says this vehicle saves fuel and is less harmful to the environment because it runs on blends of gasoline using as much as 85 percent ethanol. He adds the Ford Escape Hybrid, made at the company’s Claycomo plant, near Kansas City, will send a message that Missouri is committed to the use of ethanol – which is a boost to Missouri’s corn growers.

“I think it makes a lot of sense,” Blunt told an audience looking on at the State Fair, “To get our fuel from Missouri farmers and farmers in the Heartland of America, rather than tyrants that hate the United States and hate Americans and everything we stand for.”

The Governor has also announced an expansion of the Adult Agricultural Education Program, which provides state-funded support for family farmers to learn how to better manage their farms. And, he’s pledging full funding for the newly enacted Large Animal Veterinary Student Loan Program to ensure that family farmers in underserved areas of the state have access to large animal veterinary care.

Download/Listen: Governor Matt Blunt (2:00 MP3)

Not All Farmers Happy with Ethanol Push

By Leave a Comment

A big push on ethanol has worked. The industry is flourishing in Missouri, but not all farmers are happy. At least on one lawmaker says the push for ethanol has devastated farmers in his area.

Sen. Chuck Purgason (R-Caulfield) says ethanol has raised the cost of corn, which has raised the cost of feed, which is driving dairy farmers out of business in his south-central Missouri district. Purgason says it has already devastated his feeder pig operations, leaving few hog farmers left. He says fertilizer costs have also been driven up as more and more farmers plant more and more acres of corn. That has driven up costs in other farm sectors.

Purgason tells State Agriculture Director Katie Smith during a hearing at the Capitol that he doesn’t care much for the state mandate that nearly all gas sold in Missouri must contain at least 10% ethanol. Purgason points out his district raises little corn and has derived little benefit from the mandate.

Smith says she understands his concerns, but has faith the markets will sort things out. She says it will also help once it becomes more common to use the by-products of ethanol production, such as Dried Distillers Grains with Solubles (DDGS), for livestock feed. The ethanol industry has touted DDGS as a high nutrient feed for the livestock.

Download/listen Brent Martin reports (:60 MP3)

Three from Minnesota Die in Montgomery County Plane Crash

By Leave a Comment

Three people from Minnesota died in a small plane crash in northwestern Montgomery County. The plane had taken off from Spirit of St. Louis Airport early Thursday morning.

The State Highway Patrol identifies the victims as David McCormick, Michael Kammerer and Waylon Karsten. The patrol says the three were on their way home to Buffalo, Minnesota when the crash occurred. A spokesman for the Federal Aviation Administration says the airport lost radar contact with the plane about a half hour after take-off.

The aircraft was a single-engine Piper 46, about a year old. It is owned by McC Aviation Services of Rockford, Minnesota. The firm is a subsidiary of an ethanol manufacturer. McCormick was the company’s president. The men had been in St. Louis to attend the 23 rd annual International Fuel Ethanol Workshop and Expo.

Consumer tax breaks for flex-fuel vehicles advance

By Leave a Comment

The Missouri Senate has advanced a series of tax credits encouraging Missourians to buy and drive more hybrid and flex-fuel vehicles. Sponsor LuAnn Ridgeway lives in Clay County, home of the Ford Claycomo plant, where a lot of hybrid and flex-fuel vehicles are made.  She says 40 percent of the vehicles coming off the assembly lines there fall into those categories.

She proposes tax credits for people who use biodiesel or E85 fuel in their vehicles…tax credits for people who buy those vehicles…and—to encourage increase availability of the fuels–tax credits for the gas stations to install equipment to pump those fuels.

Ridgeway says the federal government wants more cleaner-running vehicles produced. But she says many consumers don’t know what flex-fuel or biodiesel vehicles are and don’t know why they should buy one.  She says her tax credits are consumer-driven, aimed at encouraging more purchases of those vehicles, and creation of more places where owners can get fuel for them. 

Fellow Senator Victor Callahan of Independence says the state has provided millions of dollars in tax breaks to corporations to built factories making biodiesel and ethanol.  But, he says, those tax breaks have not produced a market for those fuels.   He says Ridgeway’s tax package should help create that market. 

She says the consumer wins in two ways by getting a tax break on their vehicle…and a tax break on the costs of the alternative fuels they buy.  The Senate is likely to give its final approval next week and send her bill to the House.

(The bill is SB40)

 

 

 

Download Bob Priddy’s story (:60 mp3)

Bond Addresses Lawmakers at State Capitol

By Leave a Comment

Missouri’s senior United State Senator returns to the State Capitol to address state lawmakers. In a speech to members of the Missouri House, Senator Kit Bond (R-MO)  spoke of the need for Missouri and the rest of the country to get away from the reliance on foreign oil.

Bond says ethanol and biodiesel plants are improving farmers’ returns and offering a cleaner environment. But he says we must move beyond the stage we are at now, by looking to cellulosic ethanol which is made out of switchgrass and chips.

Bond also embraces clean coal technology, saying the United States has a 250 year supply of coal, but it is difficult to burn that coal. He says we must develop the technology to liquify that coal and take most of the pollutants out of it.

Download/Listen: Senator Bond’s address to Missouri House (15:00 MP3)

Tax Inventives Questioned

By Leave a Comment

Some state senators think it’s time to look critically at tax incentives given for business development.

Rural Senator Chuck Purgason of Caulfield and city Senator Matt Bartle of Lee’s Summit say tax incentives for ethanol development are backfiring on some farmers because more farmers are abandoning beans and other crops to produce corn to sell to ethanol producers, who are paying high prices which drive up prices to farmers who use corn for feed. Purgason says some dairy farmers in his area are on the verge of going out of business because of feed costs.

Bartle says tax credits let governments play favorites. He says government "is getting into the business…of picking preferred industry."

Also casting a skeptical eye at tax credit abuse is the Senate Appropriations Committee Chairman, Chuck Gross of St. Charles, who says government officials don’t know how to say "no" to special interests looking for tax breaks.

Some of the Senate critics argue tax credits for favored developers or businesses just place a heavier tax load on middle class taxpayers who don’t have the means to hire lobbyists to subsidize their efforts.

The discussion in the Senate has derailed Senator Luann Ridgeway’s bill giving tax incentives for various alternative energy programs.

It’s just talk so far. None of the critics has put anything on the table.

 

(The bill is SS/SB40. It is on the informal calendar in the Senate and could be brought back up for debate at any time the Majority Floor Leader allows it).

 

Download the debate (21:06 mp3)

Blunt Staunch in Support of Ethanol

By Leave a Comment

Governor Blunt says pushing ethanol and bio-diesel doesn’t just help farmers; it helps the state as a whole.

Blunt couches support of ethanol not just in conservation terms, but terms of national security during an address to the Missouri Corngrowers Association. Blunt says the state is supporting corngrowers who are leading the country away from foreign oil, often sold by America’s enemies. Blunt says the new standard set to begin next year, that nearly all gas sold in Missouri contain at least ten percent ethanol, will give a needed boost to the ethanol industry in Missouri. He rejects suggestions that the state doesn’t need to subsidize ethanol. Blunt says critics of the ethanol industry rarely acknowledge the federal tax breaks that subsidize the oil industry.

Blunt touts a recent study that estimates the ethanol and bio-diesel industries will create 7,000 jobs a year over the next ten years. And he says market forces should moderate the price of corn, a big concern for another segment of agriculture:  the livestock industry.

 

Download/listen Brent Martin reports (:60 MP3)

Agriculture advocates bolster Bio-Fuel Initiative

By Leave a Comment

Missouri’s push in bio-fuel production is a testament to the state’s role as a leader in the agriculture industry for Governor Blunt.  He says Missouri is the fourth state to forge ahead in the bio-fuel frontier with its 10% ethanol blend requirement beginning in 2008. He says he’s confident that Missouri can produce the 300 million gallons of ethanol needed to meet that standard as well as an excess for exporting. 

Blunt says he expects the market to sufficiently regulate whether enough state-produced ethanol remains in the state to meet the 10% ethanol standard.  He adds the state will be working with providers to ensure that ethanol is distributed properly. 

Livestock owners are worried about the ethanol standard’s impact on the prices of corn-based feed, which impacts their profit. Though corn prices have nearly doubled, Blunt says a healthy price is good for both farmers and the economy.  Fred Ferrell, Director of the state Agriculture Department says the high prices will simply encourage corn growers to produce more crop, which will in turn drive prices back down.  Senator Dan Clemens adds that once bio-fuel production takes off, livestock owners will have an abundance of a by-product to use as an alternative feed, dry distiller grains, or soy-bean meal.

Blunt says his bio-diesel and ethanol initiative improves air quality, creates jobs, generates additional revenue and revitalizes the rural agriculture community.  Both he and Senator Clemens say state bio-fuel production would lessen the U.S. reliance on European oil and could potentially lead to a North American Independence with fuel. The state currently has 7 bio-fuel plants in Missouri and Blunt says more are being developed.

AUDIO: Laura McNamara reports (:60 MP3)

Blunt Touts MERIC Study to Support His Goals for Bio Fuels

By Leave a Comment

Governor Matt Blunt bolsters his support for expanding the capacity of Missouri?s bio-fuels industry with a report from the Missouri Economic Research and Information Center. Blunt says the MERIC report shows that renewable fuels such as bio-diesel and ethanol help reduce dependence on foreign oil and help create more jobs. He says the study projects the industry will create 600 more jobs with an average income of $40 thousand by next year. He adds that the average number of new jobs over the next 10 years will be a projected 7,000 new jobs each year. He says the industry will generate $15 million every year in general revenue and nearly $500 million in new personal income. The study also shows that every dollar spent in the industry returns 18 dollars. Overall, Blunt says there will be an average of about $550 new dollars in economic activity each year. He affirms Missouri farmers have the power to fuel the nation. The state currently has 7 bio-fuel plants in Missouri and says more are being developed. Blunt says his proposal for the bio-diesel and ethanol incentive fully funds the industry and covers the more than $5 million the state promised, but has not yet fulfilled, for farmers through the ethanol incentive fund. The Governor also points out legislation he has sigend that requires all gasoline sold in Missouri to include a 10% ethanol blend beginning in 2008.