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by Amy Beth Graves

"Demand fiscal responsibility for the state of Ohio" is listed as one of the seven goals of Ohio Farm Bureau Federation this year. Put a checkmark next to that goal now that the state has passed a two-year budget that limits state spending to its lowest level in 40 years.

After months of wrangling over Gov. Bob Taft's sweeping Medicaid and tax reform proposals, the Ohio General Assembly and Taft signed off late last month on a $51.25 billion two-year budget. Taft's original proposals were mostly intact.

The budget restrains growth in state spending (4.1 percent over 2006-2007) and enacts structural reform of Medicaid, which was projected to account for nearly 40 percent of the state’s expenditures. Comprehensive tax reform is aimed at making it more attractive to do business in Ohio. Farm Bureau research shows most farmers and agribusinesses will benefit from a 21 percent across-the-board cut in personal income tax rates.

"Our members understand that slowing the growth of government was the biggest accomplishment we could hope for in this budget. We made some good progress toward that goal," said Jack Fisher, OFBF's executive vice president, noting that Farm Bureau will continue to press for fiscal responsibility.

Fisher complimented Farm Bureau members for their grassroots lobbying efforts during the budget process. At Ag Day at the Capitol, Farm Bureau members talked to their lawmakers about the importance of Medicaid and tax reform, and OFBF President Bob Peterson and Treasurer Jeff Zellers joined Taft in promoting the governor's tax and budget reforms on April 15.

"While not perfect, the budget should help improve Ohio's economic and business climate. It provides protections for small family farms and agribusinesses," said Rocky Black, OFBF's director of legislative affairs. "In tight fiscal times, the bill ensures adequate funding for vital programs at the Ohio Department of Agriculture, Ohio Department of Natural Resources, Ohio Agricultural Research and Development Center, 4-H and Extension."

Through its lobbying, Farm Bureau was successful in getting the elimination of a proposed 30 percent increase in the kilowatt-hour tax and a change in the new commercial activity tax (CAT) that will be of benefit to the majority of farmers and small businesses. The broad-based, low-rate CAT, which replaces the corporate franchise tax, levies .26 percent on all annual sales of $1 million or more. As originally proposed, those with annual sales of between $40,000 and $1 million would have to pay a fee. Farm Bureau successfully lobbied to get that threshold raised and now those with sales of between $200,001 and $1 million would pay a $175 fee.

Recognizing the importance of having an effective regulatory program for livestock facilities, the Senate added $200,000 for livestock regulation. Poultry inspection also netted an additional $73,000 in the final version of the budget.

The administration originally proposed reduced funding for the Soil and Water Conservation District (SWCD) but that funding was restored. SWCD will get $9.8 million per year; Ohio Department of Agriculture, $47.9 million (2006)/$47.7 million (2007); Ohio Agricultural Research and Development Center, $35.8 million, and Extension, $25.6 million.

Medicaid spending will increase less than 5 percent over two years – two-thirds less than what analysts had projected it would grow by in 2006 if changes were not made. Other Medicaid reforms include placing a number of aged, blind and disabled Medicaid recipients into managed care, streamlining of pharmacy services and creating a legislative oversight panel to monitor reform and hold state administrators responsible. A comprehensive data warehouse also would be created to fight duplication and fraud in payments, boost recovery of payments and track providers.

"We're progressing toward a Medicaid program that serves those who need it and is accountable to those who pay for it," Fisher said.

The budget also sets the state sales tax at 5.5 percent, increases funding for primary and secondary education by less than 3 percent per year and increases the tax on a pack of cigarettes from 55 cents to $1.25.

"It’s our belief that this budget is good for not only Ohio’s farm families but for everyone who lives and works in the state," Fisher said.