Wednesday, February 02, 2000
Bunning: Help burley farmers
Senator would bar tax on settlement
BY SUSAN VELA
The Cincinnati Enquirer
U.S. Sen. Jim Bunning has introduced legislation to free tobacco growers in Kentucky and throughout the nation's tobacco-growing belt from paying federal taxes on settlement checks they recently received from tobacco companies.
Mr. Bunning, R-Southgate, said tobacco growers need the relief after contending with too many hard knocks.
Said Mr. Bunning: “Tobacco farmers are being pounded from all sides. ... Between the Clinton administration's war against tobacco, the recent drought, and quota loss due to less domestic demand and shrinking foreign markets, the morale of Kentucky's farm families is at an all-time low.”
The legislation is pending in the Senate Finance Committee. However, some Northern Kentuckians already doubt it will be approved. They say anti-tobacco sentiment is too strong among politicians coming from nontobacco states.
“It's just hard to get a senator from a nontobacco state to do anything good for tobacco,” said Kim Kinman, executive director of the Farm Services Agency for Boone, Campbell and Kenton counties. “I admire (Sen. Bunning) for trying. Anything he can do ... is going to help.”
Legislation pending before the Kentucky General Assem bly also would exempt Kentucky tobacco growers from paying state taxes on the settlement checks.
Tobacco growers in Kentucky received checks in early January that totaled $108.9 million; about $380 million went to growers in the 14 states in the tobacco-growing belt.
That was their first share of a 12-year court settlement in which tobacco companies compensate tobacco suppliers — those who own the tobacco quotas, landowners and farmer tenants — for the expected drop in tobacco demand from rising cigarette prices.
The tobacco companies say they must raise cigarette prices to pay for the much larger national tobacco settlement, $206 billion payable over 25 years to states for health-related costs.
Mr. Kinman said the settlement checks to farmers — and any tax relief they can get — is important right now because growers will be expected to cut their tobacco crop by about 45 percent this year.
The federal government sets the quota, which is the amount of tobacco farmers can grow and sell.
When he heard about the projected 45 percent cut in crops, Grant County grower Marshall Kinsey was shocked. “Ooh, I might as well quit,” said the 65-year-old director of the Grant County Farm Bureau.
He expects Mr. Bunning's tax relief legislation to hit a brick wall.
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