Lawmakers press for a fix to farm overtime tax credit as administration seeks housing and workforce investments

Lawmakers used the Jan. 27 budget hearing to press the administration for a fix to a state overtime tax credit aimed at helping farms comply with new overtime rules and to press for larger investments in farmworker housing.

Sen. Michelle Hinchey and other committee members said they expected corrective language in the budget after the governor vetoed a legislative fix last session. Senator Hinchey noted the governor's veto message directing the Departments of Tax and Finance and Agriculture and Markets to work with the legislature on a solution.

Commissioner Richard Ball said the administration and industry are "still meeting with tax and finance as department. And we also are meeting with the industry," adding that the varied business structures on farms (sole proprietors, partnerships, LLCs, S and C corps, management companies) make the drafting complex and that the administration hopes to produce workable language shortly.

Why it matters: Farm groups and lawmakers say a workable refundable or otherwise accessible credit is critical to help farms absorb higher labor costs and avoid cash-flow problems that arise from retroactive payroll obligations.

Housing and implementation concerns

- Commissioner Ball described the farmworker housing revolving loan fund and supported an additional $5,000,000 proposed by the governor; dairy and other farm representatives at the hearing urged raising the per-project cap (currently $200,000) to a larger amount to reflect current construction costs.

- Dairy and farm advocacy groups told the committee the housing program is oversubscribed and that increasing both the program pool and per-project caps would help recruitment and retention.

Next steps

Officials said they would continue technical talks and aim to have clarified tax-credit language during the budget amendment window; no formal legislative action occurred at the hearing.