Below is a summary of some of the key issues Farm Bureau worked on in the 2,876 page budget bill (House Bill 64).
The final version of tax reform largely reflects the preference of the legislature to avoid increases in sales and severance taxes to fund larger income tax cuts, in favor of a smaller income tax cut.
The tax items in the budget include:
- 6.3 percent across-the-board reduction in income tax rates.
- 75 percent tax deduction for the first $250,000 in small business income for 2015, then a 100 percent deduction in 2016 and 2017, which OFBF supported.
- A flat tax rate on business income above $250,000 at 3 percent.
- 35-cent increase in the cigarette excise tax, which is lower than the $1 Kasich sought and the 40 cents in the Senate version.
- Creation of a 2020 Tax Study Committee to study, among other things, how to transition Ohio’s personal income tax to a 3.5 percent or 3.75 percent flat tax by tax year 2018.
- Requirement that a report be made by Oct. 1 on how to reform Ohio’s severance tax.
Farm Bureau proposed two changes to the Current Agricultural Use Value (CAUV) be included in the Senate version of the bill and then again in conference committee.
Those changes were:
- Remove non-farm influences from the formula by requiring the simple “Band of Investment” mortgage-equity appraisal method be used to calculate the capitalization rate. Using this method would help ensure land is being accurately valued for its income potential from farming alone.
- Strengthen environmental stewardship and improve water quality by placing all land committed to year-round conservation practices as defined in Revised Code 5713.30(E) at minimum value.
Farm Bureau decided to propose these legislative changes because the Department of Taxation indicated it would not make more changes to the formula. A small window existed to keep these inflationary factors in the formula from impacting farmland being revalued in 2015.
In an action alert, more than 1,000 OFBF members made contact with legislators asking them to incorporate Farm Bureau’s CAUV changes in the budget bill. In the end, legislative leaders did not include the changes in the budget bill, citing a need for more time to fully understand the proposal. While Farm Bureau is disappointed that these priority issues could not be amended into the budget, legislative leaders and the governor’s office have made commitments to continue to meet with OFBF on these proposals.
Farm Bureau lobbied and won support for several programs that will help provide water quality research and technical assistance. Of note were 5 percent increases for Ohio State University’s Ohio Agricultural Research and Development Center and its Sea Grant program. Farm Bureau won support for additional funding of the Healthy Lake Erie Program and that money be set aside for Soil and Water Conservation Districts in the Western Lake Erie Basin to be used for technical assistance to farmers for Senate Bill 1 compliance. Farm Bureau also secured changes to allow the AgLink program, a loan interest rate reduction program, to serve farmers making capital improvements needed to comply with SB 1.
Ohio Department of Agriculture
Most funding for programs within the department was held steady. OFBF supported efforts for the restoration of cuts made by the House for dairy and food safety programs.
Transfer of nutrient management to the Ohio Department of Agriculture
The budget included a provision to transfer the division of soil and water in the Ohio Department of Natural Resources as well as the soil and water conservation districts to the Ohio Department of Agriculture. ODA currently oversees concentrated animal feeding facilities and fertilizer application while ODNR oversees agricultural pollution from non-permitted livestock farms. Under the proposal, ODA would have jurisdiction for all agricultural pollution issues, including inspections and enforcement of violations involving non-permitted livestock farms. Farm Bureau supports the concept of the transfer as it combines similar programs under one agency and gives farmers a single point of contact for nutrient issues.
Farm Bureau called for lawmakers to fix aspects of the governor’s education funding proposal that disproportionately decreased funding for rural school districts. Both the House and Senate improved the funding scheme. The conference committee largely used funding levels from the Senate version, which invested $935 million more than current funding levels and ensured rural schools would not receive funding cuts.
Career technical education
Farm Bureau helped win support for changes to allow career tech funding to be based on a true per pupil allocation, rather than be subject to arbitrary limits.
Ohio Farm Bureau supported judicial pay be increased in the state after Ohio Supreme Court Chief Justice Maureen O’Connor addressed OFBF’s board. HB 64 will increase the salaries for Ohio’s Supreme Court justices and judges of the court of appeals, courts of common pleas, municipal courts and county courts by 5 percent each calendar year beginning 90 days after the budget becomes effective. The last increase will begin January 1, 2019.