OABA is Monitoring State Budget Process

HB 59 Introduced Last Week

The Ohio biennial budget process has begun. Early February saw Governor John Kasich introduce his proposal followed by the House’s version (HB 59) last week. Gov. Kasich is proposing sweeping changes to Ohio’s sales tax with increases on many services that were not previously subject to sales tax. This increase is intended to offset a planned decrease in the state’s income tax over the next three years. The governor has also introduced a new school funding plan with mixed support and a proposed expansion of Medicaid.

Ohio AgriBusiness Association staff is monitoring the budget process and evaluating how proposed changes could impact our members. In regards to the expanded sales tax, agriculture fares relatively well at this point with soil prep, custom baling, other ag. services and veterinary services for livestock retaining a sales tax exemption. Horse board and training would be subject to a new 5 percent sales tax as proposed. Click here for an overview of the proposal to expand the state’s sales tax, compliments of Bricker & Eckler LLP, an OABA member company.

In addition to the sales tax changes, we have also reviewed the proposed budgets for the Ohio Department of Agriculture, the Ohio Agriculture Research and Development Center and The Ohio State University’s Extension Service. At this point, after conversations with our friends at ODA, it seems there is adequate funding for their activities. The current funding recommendation for ODA’s General Revenue Fund for 2014 is $15.3 million (or a 4.8 percent increase from fiscal year 2013). Funding for fiscal year 2015 is $15.1 million (or a 1.3 percent decrease from fiscal year 2014). Total funding (all sources) for fiscal year 2014 is $52.4 million (or a 15.5 percent decrease from fiscal year 2013). Funding for fiscal year 2015 is $52.2 million (or a 0.3 percent decrease from fiscal year 2014).

ODA’s fiscal soundness is important to our industry for a number of reasons, but a few highlights include:

• Administration of numerous food safety, consumer protection and animal care programs which instill customer confidence in our agricultural products.
• Issuance of more than 50,000 licenses, permits and registrations to livestock dealers, renderers, auctioneers, grain warehouses, pesticide applicators and dealers, feed dealers, nurseries, dairies, haulers, food processors, home bakeries, farmers’ markets, amusement parks, travelling ride companies and large livestock farms.
• Performs inspections of 212 of Ohio’s meat processing facilities every day that processing is occurring. In 2011, ODA’s laboratories completed more than 775,000 tests for animal disease and drug use, harmful pathogenic bacteria in food and feed, as well as tests on pesticides and other synthetic substances to confirm label content claims. The Animal Disease Laboratory and Consumer Protection Laboratory alone tests increased by 77,854 from 2010 to 2011.

Ohio Agricultural Research and Development Center provides support to Ohio farmers and agribusiness in a number of ways through their ongoing research. At this time, their funding remains at 2012 levels. The same is true for OSU’s Extension Service.

The Ohio AgriBusiness Association will be monitoring HB 59 throughout the budget process. We have been meeting with legislators – and will continue to do so – to remind them of the importance of Ohio’s number one industry. What the state spends on agriculture is a small price for the $107 billion impact it has on our state.

Contact Chris Henney at 614-326-7520 with questions about the state biennial budget process or concerns about how it may affect your business.