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Government Affairs: Congress moves ever so slightly toward a better understanding of industry labor issues

October 5, 2017 -  By

Last month, I spent two days in Washington D.C. with about a hundred green industry company owners and state and national association staffers to push forward the industry’s agenda with Congress.

The effort was organized by AmericanHort, a national association that represents nursery and greenhouse growers, landscape contractors and garden centers across the county.

Company owners and association staffers spent time meeting with their respective state senators and representatives to push for action in three main areas: guest-worker program reform, tax reform and research support.

Guest-worker program reform

Although we had an agenda with three main issues, our industry’s labor woes were top of mind as we began our meetings. We focused on asking for immediate relief on the H-2B visa cap and support for two bills, the “Save our Small and Seasonal Businesses Act of 2017” (S. 792) and the “Strengthen Employment and Seasonal Opportunities Act” (H.R. 2004). Both bills would reform the H-2B seasonal worker program.

The general feedback from the group of company owners in a post-meeting debriefing session was cautiously optimistic. Many of those participating saw small but encouraging signs that Congress may be moving toward a better understanding of the labor needs facing the green industry.

Personally, I saw similar positive movement in the Pennsylvania Congressional delegation among members with which I met. Rather than the outright challenge from some in Congress that our industry simply chooses not to hire American workers, we heard more sympathy for our labor plight.

While the overall experience was positive, much work remains to translate the understanding into legislation that will fix the problem.

Tax reform

The Trump administration and Congressional leadership have set federal tax reform as their top priority for the fall. While there was much rumor and discussion about what might be contained in a tax reform package, few details were available.

In fact, even with the release last week by the Trump Administration of a broad outline of their tax reform proposal, what might be contained in a final tax reform bill is still very cloudy.

Several Congressmen with whom I met expressed frustration with the current process being used by Congressional leadership and the Trump administration to develop the tax reform package. The package is being written behind closed doors by a so-called “Gang of Six” comprised of two Trump administration officials and four Congressional leaders. Rank and file Congressmen had little knowledge or input into how the tax reform package was developing.

Nonetheless, in our discussions we focused on several key elements of tax reform that we wanted to see and some we did not want to see in a final bill.

Preserving cash accounting

The rumor in Washington D.C. is that one of the tax reform proposals being considered is the elimination of cash accounting for all but the smallest firms (under $500,000 annual revenue). Firms in our industry overwhelmingly utilize cash accounting when calculating their tax liabilities. Converting to accrual accounting would be a major burden to our industry.

The switch to accrual accounting would result in higher tax bills for companies, which is why it’s being considered. Accrual accounting would generate higher tax revenue to offset some of the tax cuts being considered elsewhere in the reform package. We asked our senators and representatives to preserve the ability of our companies to use cash accounting.

Preserve deductibility of interest charges

The Trump administration is considering eliminating the ability to deduct interest charges as a business expense. Seasonal businesses like landscape contracting rely heavily on credit for working capital and equipment purchases. We let our Congressional delegations know that we are opposed to eliminating the deductibility of interest expenses.

Eliminate estate taxes

Many green industry companies are land-intensive operations and much of a company’s value can be in its real estate holdings, which have appreciated significantly in the past years. The estate tax hits these companies especially hard as owners attempt to pass on to their children the family business, at times jeopardizing business viability. The estate tax generates only 0.6 percent of all federal revenue, so it’s not a significant part of the overall budget. We advocated to eliminate the estate tax as a part of their tax reform efforts.

Keep step-up in basis of inherited property

Current legislation permits step-up in the basis of inherited property when it passes to a new owner. If this step-up provision were to be eliminated in the new tax reform proposal, as some rumors suggest, owners of inherited land could see a massive capital gains tax bill when they sell an inherited asset. We urged our senators and representatives to keep this important provision in existing tax law.

Research support

The green industry is made up of many small businesses. As such, we do not have the resources to conduct much of the applied research necessary to keep our industry viable, especially when it comes to plant pests, diseases and the use of automation to help solve our labor shortages.

Several programs in the U.S. Department of Agriculture provide funding for research needed by the industry: the Floriculture & Nursery Research Initiative, the Specialty Crop Research Initiative, the Plant Pest & Disease Management & Disaster Prevention (section 10007), and the Specialty Crop Block Grant Program.

These programs have supported research on such important plant disease issues as Asian Longhorned Beetle, Emerald Ash Borer and Boxwood Blight. In addition, the programs have supported research into the use of labor-saving automation and robotics in our industry.

In our meetings, we urged those we met with to continue funding for these programs.

Get involved!

I encourage you to contact your representatives and senators about these issues. We will only see changes in Washington if we make our collective voices heard loud and clear.

For more information on these issues, or help in contacting your federal officials, contact your state association, AmericanHort or the National Association of Landscape Professionals.

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Gregg Robertson

About the Author:

Gregg Robertson, Landscape Management's government relations blogger, is a government relations consultant for the Pennsylvania Landscape & Nursery Association (PLNA) and president of Conewago Ventures. From 2002 until May 2013 he served as president of PLNA. Reach him at gregg.robertson@conewagoventures.com.

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