If you want something from the Missouri Legislature, it’s good to be a farmer. Last spring, after finishing work on the state’s $27.2 billion fiscal 2017 budget, lawmakers passed a few more tax breaks. The big one was $50 million in potential retroactive tax refunds for farmers who received federal disaster insurance for damage caused by the epic drought of 2012. People who sign up for exercise classes also will get a $5.7 million break on sales taxes. In June, Gov. Jay Nixon vetoed those tax breaks. On Sept. 14, the Legislature overrode his veto. The next day, Nixon put a hold on $57.2 million more from the budget passed in the spring. He’d already withheld $115 million in spending, saying the Legislature had overestimated the amount of money the state would take in. If the economy picks up dramatically, the money could still be spent. Because of all of this, farmers are going to get money that otherwise would have gone mostly to highways, school transportation and K-12 education, which absorbed the brunt of the budget hold-backs. It could be farmers’ tax refunds won’t amount to $50 million, but Nixon’s budget office estimates they will. This is what happens when you have a lot of needs and not enough money to meet them. Relative to their tax burden when the 1980 Hancock Amendment was passed to block the state budget from growing faster than the average family’s budget, Missourians are currently undertaxed by about $3.9 billion. But no one in Jefferson City wants to touch that one. The Missouri Farm Bureau is the state’s most powerful lobby. While it milks the image of the sturdy yeoman farmer, most of its business comes from brokering insurance, including federally subsidized crop insurance. When a farmer buys insurance on his crops, federal taxpayers pick up about 60 percent of the cost. When drought ravaged the Midwest in 2012, taxpayers covered most of the losses. In fact, a 2012 study by the University of Missouri Extension Service found that over the previous decade, Missouri farmers had received $1.80 in federal crop insurance indemnities for every dollar they paid in premiums. “Insured farmers had a pretty good year,” MU economist Raymond Massey said after the 2012 drought. Crop insurance payments were paid out in 2013 and thus were taxable in 2014. The Internal Revenue Service generally treats such payments as taxable income. So did Missouri and 39 other states that levy income taxes. But by passing Senate Bill 641, and then overriding Nixon’s veto, the Legislature decided that from now on, and retroactively to 2014, crop insurance payments no longer are subject to the state income tax. With enough tax-free, taxpayer-subsidized insurance, some farmers could be praying for drought. It’s good to be a farmer. Source - http://www.stltoday.com