Farm Bureau’s position on Ohio’s biennial budget bill

Compiled by staff

Ohio’s next two-year budget has passed out of the Conference Committee and will be considered by the full House and Senate this week.

After extensive deliberation, Ohio Farm Bureau’s board of trustees voted to approve this budget bill. The budget as a whole provides support for many critical programs for the agricultural community and its tax provisions have been amended to address many of Farm Bureau’s concerns.

Several Farm Bureau priorities were achieved. We made an effective case for sufficient funding for Ohio State University’s Agricultural Technical Institute (ATI), gained increased funding for Ohio’s Agricultural Research and Development Center (OARDC) and OSU Extension, maintained funding for research to help farmers protect our state’s water resources and were successful at protecting our members’ interests within the tax reform process.

Breakdown of our budget achievements:

ATI Funding: A funding plan that will help ATI avoid a projected 32 percent loss in Fiscal Year 14 through a provision that will ensure they receive at least 96 percent of their current level of funding. Additional funding was also included for FY 15 equal to the amount of facility support ATI previously received in the old funding formula ($503,870).

Ohio Agricultural Research and Development Center (OARDC): 3.1 percent increase in funding ($34,126,100 in each year)

OSU Extension: 3.9 percent increase in FY14 and a 3.76 percent increase for FY15 ($23,086,658 and $23,056,658)

Ohio Sea Grant Program: Funding reinstated to $285,000 annually (was at $0)

Heidelberg’s Water Quality Lab: Funding reinstated to $250,000 annually (was at $0)

Ag 5th Quarter Project: An increase in the funding level for this program from $300,000 to $600,000, allowing more teachers to provide hands-on educational opportunities outside the classroom.

Extended Programming and Ag Education Requirements: A provision that clarifies extended programming (educational opportunities outside the classroom) may be conducted anytime outside of the normal school day, not just during summer months. It also requires the Department of Education to conduct a review and issue recommendations for what constitutes quality agricultural education programming – to include classroom instruction, FFA and Extended Programming.

Clean Ohio Fund: Appropriated $52 million for the fund’s Green Space Preservation, Farmland Preservation, Brownfield Remediation and the Trails programs. This is the total amount still available from the $400 million approved by voters in 2008.

Commercial Activity Tax (CAT) Grain Handlers Exemption: Creates equity in the application of the CAT exemption by applying it to all grain handlers. Currently, the exemption only applies to grain handlers who are part of a cooperative.


Farm Bureau members rallied to express our concerns with the proposed tax reform package that would have decreased from $1 million to $500,000 the threshold at which the 0.26% Commercial Activity Tax (CAT) would be applied. We appreciate that the House and Senate conference committee has decided to protect that critical $1 million threshold. Those farmers that would have paid more by falling under this new tax will instead be able to use financial resources to invest in their farms.

There was open discussion during the conference committee process that helped Farm Bureau to better understand the proposal to repeal the property tax rollback. Our members will be better suited to plan for the future and have a clearer picture of their tax obligations knowing that the rollback repeal will only apply to new or replacement levies and NOT to existing or renewal levies.

Breakdown of tax changes:

To make up the lost revenue of keeping the $1 million gross receipts threshold, under which businesses continue to pay the $150 flat fee, the plan creates a tiered fee system for the CAT.

  • Businesses with gross receipts of $1 million to $2 million would pay a flat fee of $800 in addition to the .26 percent CAT rate;
  • Businesses with gross receipts of $2 million to $4 million will pay a flat fee of $2100 in addition to the .26 percent CAT rate, and
  • Businesses with gross receipts above $4 million will pay a flat fee of $2600 in addition to the .26 percent CAT rate.

10 percent across the board personal income tax rate reduction phased in over 3 years beginning in tax year 2013.

Targeted income tax exclusion for owners/partners/shareholders in a pass-through entity equal to 50 percent of each owner’s share of pass-through entity income up to $250,000.

Sales tax increase from current 5.50 percent to 5.75 percent beginning September 1, 2013.

Means testing the homestead exemption real property tax program – eligibility at $30,000 or less Adjusted Gross Income and eliminating the 12.5 percent residential/agricultural property tax rollback for new and replacement levies.

The budget bill does not change the severance tax rate nor broaden the sales tax base to include services as originally proposed.

Farm Bureau appreciates the support the General Assembly and Governor have shown for our budget priorities and tax concerns and the recognition that those items of importance to Ohio agriculture are also priorities for our state. We realize the many opportunities that this comprehensive package represents and because of that, we support passage of H.B. 59

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