It’s a time of transition for horticultural businesses in America. Many who struggled mightily in the Great Recession but survived are slowly regaining their footing. Others who want to expand are understandably anxious about everything from the Affordable Care Act to labor availability to the possible elimination of cash accounting for many larger growing operations.
Change and transition are affecting the horticultural association community, too. In some cases this means exciting opportunity, as with the launch of AmericanHort on January 1, which brings together the American Nursery & Landscape Association (ANLA) and OFA, the Association of Horticulture Professionals (see “AmericanHort Is Now In Office”).
Let’s take stock of where we are with respect to the most critical industry issues, and where we may be headed.
Affordable Care Act (ACA) and the Looming Election
The new health care law that was the signature achievement of President Obama’s first term evokes strong emotions all around. Regardless of how you feel about universal health care and the government’s role, here are two big-picture observations.
First, rarely does our government do “comprehensive anything” all that well. In the case of the ACA, it’s a shame that a flawed legislative product was muscled through on a party-line basis when there were more bipartisan and market-oriented approaches out there (such as Wyden-Bennett).
Secondly, it’s also a shame that opportunities to improve the law now seem out of reach, because Republicans don’t want to fix it, they want to repeal it; Democrats, for their part, are afraid to open it up for fear of losing control. So both parties are to blame to a point.
With 2014 being an election year, you can expect continued efforts to smooth over implementation pains through continued delays (as in the employer mandate) and executive actions. There might yet be a formal delay of the individual mandate. Yet, November 2014 is a long way off. Republicans seem to be banking on public dissatisfaction with the ACA yielding gains at the ballot box. But remember, not all provisions of the ACA are unpopular. And, the launch-with-a-thud of HealthCare.gov may be a distant memory by summer. Unless they are able to offer a consistent and compelling vision of an alternative way forward, Republicans may find that the ACA has lost much viability as an election-year weapon. Which leaves them defending the starker question, “Can they govern?”
Still, voter anxiety over the ACA may have enough lasting resonance for Republicans to hold their own. Indeed, though November is a long way off, some analysts are already predicting Republicans may gain a small handful of seats in the House. No one is yet expecting another “wave” election like 1994, 2006 or 2010, in part because so many Congressional districts are “safe” seats for one party or the other. Of 435 seats in the House, only 35 or so are considered “swing” districts that are truly up for grabs in any election cycle.
ANLA has long considered modernizing our immigration system a top priority. The reasons are simple: immigrant labor sustains many American farms, nurseries, greenhouses and other horticultural businesses. Legal immigration channels, as well as temporary visa programs, are limited and bureaucratic. An enforcement-only approach to immigration will have lasting negative economic consequences, both in and beyond the industry.
The U.S. Senate passed a comprehensive reform bill in June. While many provisions are controversial, the bill attracted significant bipartisan support. ANLA was heavily focused on the agricultural provisions, as well as improvements to the H-2B program, which is especially important to the landscape sector.
The House, sadly, pledged to address immigration in July, then September, then November/December. While five specific immigration bills have been approved by House committees, some of those bills (including an agricultural visa reform) are sharply partisan and not expected to pass on the House floor without significant changes.
On a brighter note, in early December, House Speaker John Boehner announced the hiring of Rebecca Tallent, Sen. McCain’s former chief of staff, as his new immigration advisor. Tallent is rock-solid on immigration policy and politics; her selection signals intent to find a path forward. With fiscal debates again expected to dominate the first quarter of 2014, the best pre-election window may be in May and June.
The odds are not great, but both political parties have reasons to want to see progress. And, the pro-reform coalition is as strong as it’s ever been, and now includes conservative voices across the business, agricultural, faith and law enforcement communities. Looking ahead, this will remain a top AmericanHort priority.
Committees in both the House and the Senate are working on broad tax reform. For business, the tradeoff may be giving up exemptions and deductions in exchange for lower corporate tax rates and a general simplification of the tax code. But for small business, such exemptions and deductions are often very important; there is reason to be concerned that general tax reform for corporate America may be disproportionately funded on the back of small businesses.
For 100 years, the nursery industry has enjoyed unique tax treatment with respect to cash vs. accrual accounting. Plant inventories in production are not considered to have value until they are sold. Existing tax rules are especially important for growers producing multi-year woody crops. But proposals in both chambers of Congress may limit the option of using cash accounting, especially for larger growers of multi-year plant crops.
AmericanHort is working quietly but aggressively behind the scenes to cultivate Congressional champions and make our case for the unique treatment that reflects unique circumstances in the industry. Whether Congress will soon take up major tax reform is an open question, but ideas that get onto paper in Washington tend to have long lifetimes. Better to make our case now.
The Regulatory Realm
Sure, Congress seems pretty dysfunctional these days. After all, they are even struggling to pass a once-every-five-years Farm Bill! Then again, most business owners don’t really want Congress to be overly productive. Meanwhile, at the regulatory departments and agencies — Labor, EPA and more — the gears keep grinding, the wheels keep turning.
The growing challenges and opportunities on the regulatory side have prompted ANLA to bulk up its team of staff talent with a regulatory and research focus. That investment, which will carry forward in the new AmericanHort, has already paid dividends as we’ve worked to collaboratively address challenges ranging from impatiens downy mildew, rose rosette disease and boxwood blight to import restrictions and inspection changes at the ports that threatened to slow imports of perishable vegetative annual cuttings.
Looking ahead, a good deal of our focus will be on plant commerce and novel approaches to plant certification. And involvement of the broader industry community that will be represented by AmericanHort will hopefully enable new initiatives to encourage wider successful use of trees, shrubs, flowers and other plants for the health, environmental and economic benefits they bring. As I said before, these are times of great change. They are also times of great opportunity for American horticulture!