Agency of Agriculture seeks $61.19M for FY2027; proposes shifting dairy assessment fees to general fund

The Agency of Agriculture, Food and Markets told the Appropriations Committee on Feb. 13 it is requesting $61,190,000 for fiscal year 2027 and is proposing to reduce or eliminate some dairy-assessment fees and replace that revenue with general‑fund dollars. "We have a $61,190,000 ask for FY 2027," Secretary Anton Tabitz said during the presentation.

Tabitz said the agency’s proposal is largely meant to preserve core regulatory and support programs while making modest targeted investments. He outlined the agency’s fund mix — roughly 22% general fund, 40% special funds (fees and licenses) and 33% federal funds — and described pressures that include rising personnel costs and shifting federal grant timing.

Why it matters: the agency manages several fee‑supported programs (labs, inspections and enforcement) and proposed moving some fee responsibilities onto all taxpayers to ease a direct cost on dairy producers. Tabitz framed the change as targeted relief for a troubled dairy sector while emphasizing the agency will continue existing programs.

Details and debate Tabitz identified two existing annual assessments — a medium‑operation fee and a large‑operation fee that historically ranged in the testimony from figures described as $1,500 and $2,500 — and said the agency proposes shifting those collections to the general fund. He said small farms are not charged the fee. A committee member noted the long-term implications of removing fees that currently support services, asking whether replacing fee revenue with general-fund dollars will erode self-supporting programs; Tabitz replied that programming will continue unchanged while the funding source would shift to the general fund.

The agency estimated about 141 farmers would benefit from eliminating the fees; the witness characterized the general‑fund fiscal impact verbally in the hearing but the transcript records inconsistent numeric text for the total dollar effect. The agency emphasized it would not reduce the scope of the programs funded, only the funding source.

Other priorities The agency requested one new business‑office position to manage a growing federal‑grant workload (increasing the business office from four to five staff) and flagged several continuing or level‑funded programs including county fairs, Farm to Plate and farm‑to‑school initiatives. Tabitz also highlighted the Working Lands program (agency request cited $1,000,000 on the base) and described the USDA‑backed Dairy Business Innovation Center, a regional grant program that has awarded many awards (average award cited at about $85,000) to support processing equipment and dairy infrastructure.

Federal and grant timing issues Tabitz described a $3.5 million apparent reduction in one USDA contract that was a timing effect — USDA is sending funds in different installments — and said federal funds that were briefly on hold were released and will be distributed to farmers over coming months. He also said recent federal adjustments have trimmed some education components of produce‑safety programs (about $30,000 in reduced education support) though inspections will continue.

Next steps Committee members asked follow‑up questions about fee policy and interdepartmental transfers; the agency said it will continue to provide program performance measures in the materials posted to the committee file. The presentation closed with the committee thanking the witnesses and transitioning to the next set of budget presenters.