Harrisburg, PA — Straight from the fields of their small, family farms, a contingent of Pennsylvania farmers today traveled to the state Capitol to join the Commonwealth Foundation in speaking out against Gov. Rendell’s proposed tax on smokeless tobacco.
“Pennsylvanians who own and work on small, family farms are the ones who will be hurt most by Gov. Rendell’s proposed tax on smokeless tobacco,” said Matthew Brouillette, president and CEO of the Commonwealth Foundation. “These families have been farming tobacco for generations, and it is a shame that politicians in Harrisburg are willing to destroy these businesses rather than reduce wasteful government spending.”
Brouillette noted that these farmers, many of which are Amish or Mennonite, grow tobacco because it provides additional income they need to cover annual real estate taxes and to keep their farms in production.
“The governor wants to make this issue about big tobacco companies, but it’s not,” said Tammy Weaver, who works on her family farm in Lancaster County. “It’s about small, family operations like ours in the heart of Pennsylvania, trying to make ends meet. We pay a great deal already in taxes, and tobacco farmers don’t rely on government subsidies.”
Tobacco is not grown on large corporate farms in Pennsylvania. According to a National Agriculture Census report from 2002, of the nearly 1,000 tobacco farms in Pennsylvania, the average acreage was a mere 6.1 acres per farm.
Growers aren’t the only ones who would be impacted if a new tax on smokeless tobacco is enacted. Those involved in the tobacco production network, distributors, retailers and, ultimately, consumers would feel the adverse effect on their wallets.
“Tobacco is one of the few industries flourishing and creating jobs in Pennsylvania because we’re the only state that hasn’t burdened small family farmers and consumers with the tax the Governor now wants to impose,” said Brouillette. “But Rendell’s tax won’t put a dent in the $3 billion state budget deficit. In fact it will make it worse by eliminating jobs and production that provide revenue for government’s coffers.”
Agricultural markets have been extremely volatile over the last few years due to competition from exports, unpredictable weather patterns, and a general increase in operating costs. In the midst of this volatility, the price paid for Pennsylvania tobacco has remained stable with slight increases.
During the past four years burley tobacco acreage in Pennsylvania has nearly doubled, which makes Pennsylvania the third largest producer of burley tobacco in the U.S.
Pennsylvanians have invested nearly $1 billion to preserve farmland. But tobacco growers of Amish and Mennonite faith do not participate or benefit from government subsidy programs or farmland preservation programs because of religious reasons. Instead, they rely heavily on unsubsidized markets to assure the profitability of their farming businesses.
“These farmers are not asking the government for a subsidy, but are asking the government not to tax their farms out of business,” said George Mann, a sixth-generation family farmer in Lancaster County. “Any additional tax that could affect consumption would have a real and immediate negative financial impact on the growers.”
Additional taxation on a homegrown Pennsylvania commodity will result in higher prices for consumers, which will translate into a lower demand for these commodities. Consequently, the financial impact on tobacco growers could be significant, and will impact the financial solvency of an industry that provides jobs in Pennsylvania’s rural areas.
“I would like to thank the Senate Republicans for standing up for working families and working farmers,” Weaver said. “We pay a lot of taxes already and spend a great deal of time as a family figuring out how to properly budget for our needs. It’s time for the state to do the same, and not make families bear the burden for its overspending.”
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The Commonwealth Foundation (www.CommonwealthFoundation.org) is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.