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by Seth Teter

Richard Barrett says his family never had a lot of money. His father raised crops and livestock on the 162-acre Hardin County farm he purchased after serving in World War II. He also kept a day job to pay the bills. The same year Barrett's father paid off the farm, he passed away.

Over the years, Barrett's mother maintained the farm and worked part time to help put him through college. When she died more than three years ago, Barrett found himself in a frustrating legal situation.

"She had a farm and house paid for but little cash assets. So little, she did not have enough to pay for her burial. I paid the remainder of the funeral bill, the engraving of her stone, paid the attorney and appraiser all out of my pocket," Barrett recently told a state legislative committee.

But to settle the estate, Barrett had to take out a loan to pay an estate tax. The "death tax" is collected on estates valued at $338,333 or more when the owner dies and is intended to collect revenue from the wealthy.

"The education of probating my mother's estate has left me to believe estate taxes are truly a burden of the middle class," Barrett said. "Most people with any wealth have their real estate property in trusts and their cash assets in funds with beneficiaries."

The estate tax generates about $60 million per year for Ohio, much of which is distributed back to townships, explained Rocky Black, OFBF director of policy and political affairs. But many farms are valued well above the tax threshold, which means farmers must take out loans or sell land to settle the estate. Black points to cases such as Barrett's.

"You pay $8,000 to $10,000 for the attorney and paperwork, $10,000 for the funeral and on top of that maybe a $50,000 tax. You're in considerable debt right out of the gate. That's what pushes many farmers into abandoning the farm," Black said. "The money that farmers do have is in equipment, land and buildings."

So what about the importance of revenue from the estate tax to townships? Barrett, who is also a township trustee, told lawmakers that most rural townships receive little money from the tax, and it is never budgeted for.

"When a township does receive a windfall, it's like hitting the lottery," he said. "As the system seems to be, if the township has a windfall then they must spend it quickly so not to effect the grant funding from the government. I question if we'd manage our personal money this way."

Black said OFBF is in support of two efforts to reform Ohio's estate tax. One, introduced by Rep. Larry Wolpert, R-Hilliard, would allow township trustees to repeal the estate tax in their jurisdiction. A farther reaching proposal by Rep. Bob Latta, R-Bowling Green, would abolish the estate tax but give township trustees the option to reinstate it. Either proposal faces a likely veto by Gov. Ted Strickland.

But Black said OFBF would also support raising the threshold to a meaningful level. Black said one analysis has shown that $1.4 million would be more reasonable.

"It would not exempt that many people. The township would still get money. And we would be providing relief for small family farms that are most threatened by the tax," he said.

But in Barrett's eyes, the death tax is simply a poor source of government revenue.

"I want my children to experience the way of life farming has to offer ... I'm very concerned family farms and small businesses alike may be overburdened, or worse, lost because we failed to make the right decisions," he said.

Caption: Farmer and township trustee Richard Barrett (r) meets with Rocky Black, OFBF senior director of policy and political affairs.