Friday, June 4, 2021
CapitalPress.com 3
Wash. Farm Bureau takes lead in fi ghting new tax
By DON JENKINS
Capital Press
USFS
Logs are loaded onto trucks after
a thinning operation. A bill that
would slash funding for the Ore-
gon Forest Resources Institute is
heading for a vote on the House
fl oor.
Oregon House
to vote on bill
slashing OFRI
funding
By MATEUSZ PERKOWSKI
Capital Press
Funding for the Oregon Forest
Resources Institute would be sub-
stantially decreased under a bill
that’s been cleared for a House vote
by a key legislative committee.
The institute provides education
to landowners and the public about
forest management but has come
under fi re from critics for alleged
bias and lobbying on behalf of tim-
ber interests.
Currently, OFRI receives nearly
$4 million in annual funding from a
timber harvest tax.
Under House Bill 2357, 67%
of the harvest tax revenues would
be directed to accounts aimed at
encouraging sound forestry prac-
tices and assisting family forestland
owners, overseen by the Oregon
Department of Forestry.
One-third of the harvest tax reve-
nues would continue going to OFRI,
whose board of directors would
include new members representing
the environment community and
fi sh and wildlife scientists.
The original version of HB 2357
would have eliminated OFRI but the
House Committee on Agriculture
and Natural Resources approved a
scaled-back version of the bill ear-
lier this year.
The House Revenue Committee
has now recommended an amended
version of the bill for a vote on
the House fl oor with a “do pass
recommendation.”
“I do think it provides the addi-
tional accountability we would like
to see,” said Rep. Andrea Valder-
rama, D-Portland, during a recent
legislative hearing.
Rep. Khanh Pham, D-Portland,
said she was comfortable with the
changes made by HB 2357, noting
that funding for family forestland
owners and sound forestry prac-
tice education would remain stable
under the bill.
“I’m glad we’re keeping the
overall amount of money and keep-
ing the important landowner educa-
tion program and other education
programs,” she said. “But shifting
it to ODF can actually lend some
expertise and specifi city that land-
owners receive.”
Opponents of the bill, such as
Rep. Werner Reschke, R-Klamath
Falls, said the bill was an overreac-
tion and urged lawmakers to hold
off on cutting OFRI’s funding until a
pending audit was completed by the
state’s Secretary of State.
“We’re taking a drastic step here
and we can’t walk it back until the
next session. Reducing the bud-
get by two-thirds eliminates a lot of
what OFRI does today,” he said.
The allegations of ethical viola-
tions favoring the timber industry
also occurred under a previous exec-
utive director, Reschke said.
“Do we need to tighten things
up? Do we need to take a look at
it?” he said. “Yeah, I think we do but
we also need to use the Secretary of
State’s audit as a guide.”
The Washington Farm Bureau
has taken a leading role in chal-
lenging the state’s new capital
gains tax, enlisting farmers as
plaintiff s and former state attor-
ney general Rob McKenna as the
lead attorney.
The law exempts from taxation
income from the sale of real estate
or livestock, but taxes income
from selling shares of business
partnerships, stock or bonds. The
tax will hit many agricultural pro-
ducers, according to the lawsuit
fi led by the Farm Bureau.
The Farm Bureau doesn’t want
to wait for administrative rulings
or further legislative actions to
pinpoint the tax’s reach, CEO
John Stuhlmiller said.
“We’re going for the whole
thing. It’s a bad policy,” he said.
Beginning in 2022, capital
gains over $250,000 in a year will
be taxed at 7%. The state Depart-
ment of Revenue estimates that in
2023 some 7,000 taxpayers will
owe a total of $415 million. Tax-
payers will have to submit their
federal tax returns to the state.
Capital Press File
Former state attorney general
Rob McKenna represents the
Washington Farm Bureau in a
lawsuit challenging the state’s
new capital gains tax.
The Farm Bureau claims the
capital gains tax violates the state
constitution.
The suit was fi led in Doug-
las County in Central Washing-
ton. The conservative think-tank
Freedom Foundation fi led a sim-
ilar lawsuit in the same farm-rich
county.
McKenna said May 28 voters
have repeatedly rejected constitu-
tional amendments to tax income.
Instead of trying again, lawmak-
ers are seeking to put over a tax
on income by “mislabeling” it as
an excise tax, he said.
“They know in their hearts
voters are not going to approve
a constitutional amendment,”
McKenna said. “I took this case
on because I think voters ought to
be respected, and the constitution
ought to be respected.”
In signing the bill last month,
Inslee said the tax would make
the state’s tax system more
just, calling it an “excise tax
on extraordinary profi ts that
will impact a small number of
Washingtonians.”
Inslee stressed the word
“excise,” and the bill enacting
the tax calls it an excise tax. An
excise tax, levied on transactions,
would not have the same constitu-
tional problem as an income tax.
The Farm Bureau suit argues
that other states and the Internal
Revenue Service classify capital
gains as income, so taxing capital
gains amounts to an income tax.
The state Supreme Court has
consistently ruled that income
equals property. The state con-
stitution requires classes of prop-
erty to be taxed uniformly. Also,
total taxes can’t exceed 1% of the
property’s value.
By exempting the fi rst
$250,000 of capital gains, the
capital gains tax doesn’t tax all
property the same. By setting the
rate at 7%, the tax far exceeds the
1% limit, the suit argues.
Under the suit’s reasoning, the
state could impose a fl at 1% tax
on all income, but that’s it.
The state Supreme Court
handled a similar case in 1932
after voters approved a gradu-
ated income tax, while lower-
ing property taxes. Land-rich but
cash-poor farmers supported the
initiative.
The court overturned the law.
One justice wrote that “it might not
be unwise, or even unfair” to tax a
man with 10,000 cattle at a higher
rate than a man with 1,000 head,
“but the constitution forbids it.”
A dissenting judge accused
the majority of putting the state
in a “straitjacket” and disregard-
ing the “conditions that brought it
into being.”
Democrats are making a sim-
ilar argument for taxing capital
gains. “We are taking a big stride
on the arc of the moral universe
towards a more just Washington
state,” Inslee said.
Pilot project uses dogs to sniff out little cherry disease
By SIERRA DAWN McCLAIN
Capital Press
WENATCHEE,
Wash.
— “Cherry!”
At the command, Aspen, an
Australian Shepherd, bounded
along a row of boxes, sniffi ng each.
Jan Flatten, the dog’s owner-trainer,
ran behind, holding the leash.
Suddenly, Aspen stopped. After
smelling a box, she sat by it and
looked at Flatten.
“Yes! Good girl,” said Flatten.
She gave Aspen a treat.
Aspen had just sniff ed out,
among a row of clean cherry
branches, the one piece of wood
infected with little cherry disease,
which researchers call an “existen-
tial threat” to the industry.
Here at the Wenatchee Kennel
Club in central Washington, vol-
unteers are working with research-
ers, growers, detectives and USDA
experts to train dogs sniff out little
cherry disease.
For decades, people have trained
dogs to detect explosives, diseases,
drugs and criminals. The new fron-
tier for detection dogs, experts say,
is agriculture.
Little cherry disease, caused by
phytoplasma or one of two viruses,
prompts trees to produce cherries
that are small, pale and weak-fl a-
vored, making them unmarketable.
Growers typically can’t detect
the disease until it’s too late —
when the only solution is removing
the infected tree to prevent the dis-
ease’s spread.
In a draft survey by Oregon
Texas Tech University/Ashley Rodgers
Sierra Dawn McClain/Capital Press
The Wenatchee Kennel Club
plans to bring in Nathan Hall,
Texas Tech University assistant
professor of companion animal
science, for some third-party
consulting, controlled trials
and verifi cation later this year.
Cubby, a dog in the pilot proj-
ect, looks up at Sue Edick,
waiting for the cue to smell the
boxes.
State University and Washington
State University, growers across
the two states reported removing
974 acres of sweet cherries due to
the disease between 2015 to 2020,
$115 million in lost revenue and
costs. Because survey respon-
dents manage only 26% of acreage
across the region, experts estimate
real losses are much higher.
“It’s unbelievable the number of
cherry orchards ripped out. We’re at
epidemic levels,” said Teah Smith,
agricultural consultant and ento-
mologist at Zirkle Fruit Company.
Smith, along with Hannah Wal-
ter, orchard project lead at Stemilt
Growers LLC, are providing the
Wenatchee Kennel Club with both
clean and diseased cherry tree sam-
ples for trials.
The goal of this project is to
train dogs to diff erentiate between
clean and diseased wood and to
detect the disease early, when the
trees are dormant or in the nursery
before planting.
“They’re doing really well so
far,” said Ines Hanrahan, execu-
tive director of the Washington
Tree Fruit Research Commission.
“Everything looks very promising.”
Lynda Pheasant, the pilot proj-
ect’s leader at the kennel club,
agreed.
“There’s no doubt now the dogs
know what they’re doing,” she said.
Wenatchee Kennel Club is a
volunteer-run organization founded
in 1963. The club has about 150
members and off ers 33 weekly
classes in tracking, hunting, agility
and scent work.
Six kennel club volunteers and
their dogs were chosen for the pilot
project. They come from a range of
professional backgrounds, includ-
ing the U.S. Forest Service, Hous-
ing Authority, USDA and CMI
Orchards. Most are retired.
Their dogs represent a range
of breeds. For the dogs, detection
“work” is really play.
The dogs recently completed the
fi rst seven-week series and are now
into their second course. The goal
is to get the dogs in orchards by the
end of 2021.
For this project, the Wenatchee
Kennel Club has sought support
from outside experts, including
Hallie McMullen, an Idahoan who
started training detection dogs for
criminal justice work in 1995, and
Nathan Hall of Texas Tech Univer-
sity, who recently won a $475,000
USDA grant for his own detection
dog research.
The project’s leaders say they
envision a future where some peo-
ple will become dog entrepreneurs,
some farmers will train their own
dogs and volunteers will off er com-
munity service.
Sue Edick, a volunteer, said
she’s excited to serve the commu-
nity with her dog, Cubby.
“It’s incredible what dogs can
do,” she said. “It’s thrilling to
witness.”
World’s largest meat processor, JBS, hit by cyberattack
By SIERRA DAWN McCLAIN
Capital Press
JBS USA, a subsidiary of JBS, the world’s
largest meat processing company, announced
Monday the company had been hit by an “orga-
nized cybersecurity attack” over the weekend.
According to the company’s statement, JBS
determined Sunday it was the target of a ransom-
ware attack aff ecting some servers in its North
American and Australian IT systems.
In response to the attack, according to a com-
pany statement, JBS took immediate action,
suspending all aff ected systems and calling on
third-party experts to help resolve the problem.
Sunday, the company also notifi ed the Biden
administration of the attack.
In a press briefi ng aboard Air Force One
Tuesday, Karine Jean-Pierre, the principal dep-
uty press secretary at the White House, told
reporters aboard a plane to Oklahoma that JBS
had notifi ed the administration of the attack
right away and noted it appeared to come from
a criminal organization likely based in Russia.
“The White House has off ered assistance to
JBS, and our team and the Department of Agri-
culture have spoken to their leadership several
times in the last day,” Jean-Pierre told reporters.
The White House, she said, is “engaging
directly with the Russian government” and the
FBI is investigating.
After the attack, JBS also temporarily shut
down slaughter operations in Australia, altered
shifts at some Canadian operations and canceled
shifts at several plants across the U.S.
Although JBS did not immediately respond
to the Capital Press’s request for comment
about the scale of shutdowns, according to
labor unions and notices issued to employees,
JBS’s fi ve biggest beef plants in the U.S., which
together process 22,500 cattle daily, have halted
or slowed processing. These include plants in
Colorado, Texas, Nebraska, Minnesota, Iowa
and Pennsylvania.
In total, JBS employs more than 66,000 peo-
ple at 84 locations across the U.S.
Marc Perrone, president of United Food and
Commercial Workers, a union representing JBS
meatpacking workers, said he’s pleased with
JBS’s work to resolve the disruptions. Perrone
said he is also calling on JBS to continue paying
workers even during plant shutdowns.
JBS has not yet commented on how long the
shutdowns might last, although the company
statement said that “resolution of the incident
will take time” and customers and suppliers can
expect delays.
According to the White House, USDA offi -
cials have spoken to several major meat proces-
sors across the U.S. and alerted them of the situ-
ation. USDA is assessing how the incident may
impact the nation’s meat supply, including possible
impacts for consumers and agricultural producers.
In all, the company controls about 20% of beef sold
nationwide, according to industry estimates.
Brooke Miller, president of the U.S. Cattle-
men’s Association, said he’s concerned the dis-
ruption, if it lasts long, could create a supply
chain bottleneck, potentially dropping live
cattle prices “dramatically.”
“We’ll have to wait and see, but it certainly
looks like this sort of unnatural disaster could
have the same kind of aff ect that COVID-19
had, and because of how big JBS is, maybe
even worse in terms of scale,” said Miller.
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