Access to quality animal care is critical to Idaho’s agricultural economy. But, too often, ranchers and farmers cannot access the care they need because of a lack of veterinarians. Senator Debbie Stabenow (D-Michigan) joined me in leading the reintroduction of the bipartisan S. 487, the Veterinary Medicine Loan Repayment Program Enhancement Act (VMLRPEA), that would address the shortage by helping to increase the placement of more veterinarians in areas of the country where they are desperately needed. This would also help to strengthen rural economies and protect the safety of our food supply.
Veterinarians are a critical part of ensuring our access to a safe and high-quality food supply. Unfortunately, nearly every state has a rural community that is suffering from a shortage in essential veterinary services. To help address this concern, Congress established the Veterinary Medicine Loan Repayment Program (VMLRP). This program assists selected food animal and public health veterinarians with student loan repayment for a three-year commitment to practice in areas of the country facing a veterinarian shortage. This program helps veterinarians with daunting student loan debt with making a living in a community where starting a practice may be otherwise financially impossible.
The problem is the VMLRP is subject to a 39 percent federal withholding tax on the assistance provided to qualifying veterinarians. The U.S. Department of Agriculture (USDA) administers the program and pays the withholding tax on behalf of participating veterinarians out of available program funding. This considerable tax limits the reach of the program, and interest in the program has greatly exceeded available resources. In a letter signed by more than 160 local and national organizations urging Congress to pass the VMLRPEA, the coalition reported, that since 2010, the USDA has made 388 awards to veterinarians while nearly 1,200 veterinarians have applied to fill shortage areas. The coalition found that, “Had these awards been exempt from withholding taxes roughly 130 additional veterinarians would have been selected to practice in communities throughout rural America.”
S. 487 would address this limitation by providing an exemption from the federal income withholding tax for payments received under the VMLRP and similar state programs. Thus, more veterinarians would have the opportunity to practice in small, rural communities where their services are needed and more communities will have much-needed veterinarian services.
This legislation would also help bring the tax treatment of this program in line with the tax treatment of assistance for doctors and nurses who are serving in areas of the country in need through the National Health Service Corps’ loan repayment program. In 2004, Congress exempted the benefits available under the National Health Service Corps’ loan repayment program from the federal withholding tax. Enactment of the Veterinary Medicine Loan Repayment Enhancement Act would create tax parity for the counterpart program for veterinary medicine.
A bipartisan group of 22 senators, including fellow Idaho Senator Jim Risch (R-Idaho), have backed the legislation. Co-sponsors include Senators Tammy Baldwin (D-Wisconsin), Michael F. Bennet (D-Colorado), Roy Blunt (R-Missouri), John Boozman (R-Arkansas), Thad Cochran (R-Mississippi), Joe Donnelly (D-Indiana), Tammy Duckworth (D-Illinois), Al Franken (D-Minnesota), Cory Gardner (R-Colorado), Kristen E. Gillibrand (D-New York), Mazie K. Hirono (D-Hawaii), Johnny Isakson (R-Georgia), Angus S. King, Jr. (I-Maine), Amy Klobuchar (D-Minnesota), Patrick J. Leahy (D-Vermont), Robert Menendez (D-New Jersey), Jerry Moran (R-Kansas), Pat Roberts (R-Kansas) and John Thune (R-South Dakota).
This commonsense program that encourages veterinarians to practice in underserved areas is yet another victim of our overly-complex, overly-burdensome tax code. As I work for comprehensive reform of our tax code, I will encourage the elimination of burdensome tax provisions to help meet the growing demand for veterinarians nationwide.
Mike Crapo is a Republican senator who represents Idaho in Congress.