The Year of the Horse (Got Horsepower?)
If you are looking for predictions for the new year, why not consult the Chinese zodiac? After all, Chinese civilization has been variously successful for millennia. The Chinese New Year begins January 31. It's the Year of the Horse. Will the horse come to signify for your business - swiftness and success, the horsepower to get the job done and be rewarded for it? Time will tell.
Continuing the Chinese theme, most of us have gotten the fortune cookie that reads, "You shall live in interesting times." Indeed. Those who survived the Great Recession are slowly but surely feeling firmer ground. (More than a few are doing pretty well, but don't much talk about it!) These are interesting times in the horticultural association community, too. On January 1, two of the industry's most venerable organizations - the American Nursery & Landscape Association (ANLA) and OFA, the Association of Horticulture Professionals - consolidated to form AmericanHort. The new organization will be poised to serve an industry that is changing fast but has a bright future.
Finally, these are interesting and challenging times for our nation and our federal government. Like it or not, our future is shaped by the actions, or inaction, of our government. Whether positive or negative, virtually every decision made or deferred by Congress ends up impacting your business. What might the Year of the Horse have in store in this regard?
Affordable Care Act (ACA) and the 2014 Elections
The new health care law that was the signature achievement of President Obama's first term was - and is - controversial. It has become a rallying cry for Republicans against large, complicated legislation. To their point, the ACA was a flawed legislative product, muscled through on a party-line basis when there might have been better options. So now we are stuck in a debate where Republicans only want to repeal it, and Democrats are afraid to reopen it. After the botched website launch and political damage from the President's so-called "lie of the year" (if you like your plan you can keep it), Administration continues to tweak the law, arguably exceeding their authority to do so. But implementation marches on.
As 2013 ended, Republicans seemed wedded to 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 website might be fixed. It remains to be seen how potent an election-year weapon the ACA will be. The Obama administration, for its part, will continue to try to ease implementation pains through delays (as in the employer mandate) and targeted executive actions.
We are a nation of immigrants. This reality makes it odd that our Congress is incapable of making regular, incremental tweaks to an immigration system that is poorly serving the national interest. How bad must it get before we implement actions that may make it better?
ANLA (now AmericanHort) has long made modernizing our immigration system a top priority. The reasons are simple: Immigrant labor sustains American farms, nurseries, greenhouses, landscape firms. Legal immigration options are limited and bureaucratic. An enforcement-only approach to immigration will hurt many.
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 a House version of agricultural visa reform) are sharply partisan and not expected to pass on the House floor without significant changes.
Yet there are clear signs that the horse might pull the immigration reform cart forward in 2014. Speaker Boehner has "staffed up" with a rock-solid immigration policy and political expert, a sign of his commitment to move. The December budget agreement lessens the risk of another messy government shutdown. Pressure is sky-high to move at least some reform bills. 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. The best pre-election window may be from April to June. Achieving immigration reforms that provide employers with the tools to hire and retain a legal workforce will remain a top AmericanHort priority.
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. For those who opt for the cash method, 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 Congress may limit the cash option, especially for larger growers of multiyear plant crops.
AmericanHort is cultivating Congressional champions and making the case for tax treatment that reflects our unique industry. Though prospects for tax reform in 2014 are dimming, ideas that get onto paper in Washington tend to resurface. Better to make our case now.
As 2013 came to a close, Congress had not even been able to reauthorize a farm bill! Yet there is a sense of optimism that it will happen in January. For our industry, bill provisions on research and plant pest prevention and mitigation are among a handful of top farm bill priorities.
Not Just Congress
Regardless of what Congress does or doesn't get done, the gears keep grinding, the wheels keep turning at EPA, the Labor Department, and more. Regulatory threats and opportunities have prompted us to bulk up our technical staff addressing regulatory and horticultural research issues. That investment has already paid dividends as we've worked to collaboratively address emerging challenges like boxwood blight, impatiens downy mildew and rose rosette disease. Looking ahead, there are opportunities to modernize the system for plant certification and trade to address regulatory threats and keep access to new varieties.
Even in these "interesting times" of rapid change, one thing remains the same. Fending off challenges and seizing opportunities to increase use of trees, shrubs, flowers and plants requires collective action. Associations are still the best vehicle. In this Year of the Horse, the leaders and staff of AmericanHort are working hard to create a unique new organization that is part thoroughbred, part workhorse. We hope you'll join us!
Craig J. Regelbrugge is senior vice president, industry advocacy and research for AmericanHort, the newly formed association resulting from the consolidation of the American Nursery & Landscape Association (ANLA) and OFA - The Association of Horticulture Professionals. He can be reached at CraigR@AmericanHort.org.