MOREAU — Despite an appeal from a local farmer, Gov. Andrew Cuomo has vetoed a bill that would encourage low-interest loans for risky agricultural projects.
Farmer Rachel (Czub) McDermott had hoped the Rural and Agriculture Jobs bill would bring the needed investment to get her grain hub running full steam.
But there’s still hope, Cuomo said in his veto message:
“The bill’s stated goal to promote jobs in rural areas is a laudable one, but the bill faces insurmountable legal, technical and fiscal problems that make it impossible to sign,” he wrote. “Thus, while I am constrained to veto this bill, I look forward to working with the Legislature to develop a program that meets this bill’s stated purpose of improving rural and agricultural jobs.”
The bill would have encouraged banks and private investors to invest in agriculture by giving a tax credit to investors whose agriculture investment led to job creation.
McDermott, whose family owns WestWinds Farm, returned from a big-city finance career to bring the farm into the 21st century. For years, she has been working on a plan to buy grain from other farmers, sort it by type for sale to breweries and distilleries and, eventually, have a brewery and distillery on site. Already, the grains business is 10 percent of the farm’s overall gross income and has triple to quadruple the profit margin of the family’s feed business, she said.
That means there is potential for huge growth. She envisions hiring about 12 people at the Moreau grain hub once the site is fully built out. The hurdle so far has been money.
She urged Cuomo in videos to visit the farm and sign the bill.
But Cuomo, in his veto message, said the bill wasn’t ready.
The bill would give investors a tax credit. The problem lies with insurance companies that would invest: They would also get a credit against their franchise tax. The franchise tax is a retaliatory tax on insurance companies whose home state imposes taxes against New York insurers that are higher than the taxes New York imposes on the insurance company.
By federal rules, the state can only apply a franchise tax if it is non-discriminatory. Allowing some companies to avoid the tax jeopardizes its federal status as a franchise tax. That could potentially put at risk millions of dollars in state franchise tax revenue, Cuomo wrote.