The Ohio Farmers Union made contact with more than a dozen state legislators earlier this week during our 2012 Ohio Legislative Day in Columbus and discussed hot topics like the shale oil and gas boom in eastern Ohio, the Ohio Turnpike, restoration of funding for the Office of the Ohio Consumers Counsel, grain indemnity and Ohio’s renewable energy goals.
Fracking and taxes
The spotlight in Columbus has been on Gov. John Kasich’s proposal to raise the severance tax on natural gas, oil and natural gas liquids taken from horizontal wells in the state. Ohio’s severance tax system has not been changed in 40 years. The Kasich Administration would have 100 percent of new revenue collected by a revamped tax system going to Ohio personal and business income tax payers in the form of reductions in tax rates dependent upon how much revenue accumulates each year in a fund containing the new severance tax revenue. Kasich proposed the severance tax change as part of a 3,000 page Mid-Biennium Review bill. (MBR)
House Finance Chairman Ron Amstutz, R-Wooster, has stripped the tax provision from the House version of the MBR, but Kasich has vowed to fight on calling the severance tax increase a neutral net effect on Ohio’s tax code due to the proposed reduction in income taxes. Kasich has also said that he believes all Ohioans should benefit in some regard from the shale oil and gas boom.
The night before OFU’s Legislative Day, the OFU Executive Committee met and considered a proposal for the family farmer organization to support changes to the severance tax if 10% of the new revenue is carved out for purposes which could include local governments, schools, infrastructure and environmental cleanup or restoration in shale counties. The committee has asked OFU’s Policy Committee to consider a more detailed proposal.
“The governor expects Ohio would raise between $500 million to $1 billion in the first five years of a revamped severance tax system. It seems prudent to use some of these funds for public purposes given that state support for local governments and education has been slashed over the past year and a half,” said Roger Wise, OFU president.
In OFU’s meeting with House Ag and Natural Resources Chairman Dave Hall, R-Ashland, Hall told the group that he supported separating any severance tax legislation from the larger MBR in order for members to have more time to consider the issue. He said the MBR process is too rushed for the severance tax issue and legislators would consider it separately.
That was a common refrain heard in most legislative offices, however most Republicans told OFU members that they would be surprised if any new tax revenue was carved out for local governments.
The Ohio Turnpike
On the Ohio Turnpike issue, OFU told members that the organization remains opposed to proposals to privatize.
“We see few outcomes from selling the turnpike – higher tolls, poor maintenance or both,” Wise said.
Wise told Rep. Casey Kozlowski, R-Pierpont, that in the past OFU has advocated for the turnpike to be turned over to ODOT which would have the benefit of spreading federal transportation dollars more evenly across Ohio. While the turnpike is governed by the Ohio Turnpike Commission, northern Ohio receives a lesser share of those dollars than other parts of the state due to turnpike revenue.
Kozlowski and other legislators said that the turnpike issue has cooled down since the Kasich Administration chose to conduct a feasibility study on the privatization question.
In 2008, a bipartisan bill passed and was signed by former Gov. Ted Strickland which fine-tuned regulations for the electrical generation industry in Ohio. A centerpiece of that legislation for environmentalists and alternative energy advocates was a provision to require 25% of all electricity sold in Ohio to come from renewable resources by 2025. OFU is a big supporter of this and alternative energy projects in the form of wind, solar and bio-digesters have become a part of many family farming operations.
OFU members told legislators that ongoing talk by some electrical utilities of lobbying the Ohio General Assembly to drop the 25% renewables requirement would be a mistake.
Sen. Cliff Hite, R-Findlay, who serves as chairman of the Senate Agriculture, Environment and Natural Resources Committee told OFU that retooling of Ohio’s grain indemnity law is planned to be part of an agricultural omnibus bill. Ohio Dept. of Agriculture staff has submitted the proposed changes to the law to legislators and have also been told it will be included in an omnibus bill. OFU will continue to monitor the progress of this producer-funded safety net for farmers in the event of grain elevator failures.