WASHINGTON — It’s been on the mind of Farm Bureau leaders on countless trips to Washington, but the estate, or “death”, tax remains one of the farm group’s legislative priorities.
Congress voted to end estate taxes in 2001, providing relief through rate reductions and an expanded exemption, with a complete repeal in 2010. But the bill’s provisions expire in 2011, meaning Congress needs to pass additional legislation before then.
The Democrats don’t want the repeal to go into effect, said Pat Wolff, American Farm Bureau Federation tax specialist. Speaking March 13 to the Ohio Farm Bureau delegation visiting Washington, she called 2009 a “do or die year.”
The Farm Bureau is pushing for a permanent elimination of estate taxes, but if that isn’t in the cards, it supports increasing the exemption to $10 million per person, indexed to inflation.
The farm group estimates the average estate tax payment in 1999 to 2000 was the equivalent of one-and-a-half to two years of net farm income.
Legislators’ stances were all over the board.
Sen. Sherrod Brown told the farm leaders he doesn’t think the tax should be repealed, but does agree “we need a good-sized exemption.”
“If we repeal it, it would mean tens of millions of dollars every year,” he said.
Plan your death
If you want to die, you want to die in 2010, said Rep. Bob Latta, R-Bowling Green, referencing the year the current repeal takes place.
Latta, who was recently appointed to the House ag committee, urged the Farm Bureau members to “get on these people down here.”
“We’ve got to make sure folks who want to continue farming, can.”
If the exemption lands at $675,000, “it will crush us,” Latta said, citing a recent real estate sale of an 80-acre homestead in Delaware County, Ohio, that sold for more than $800,000. Individual farm assets easily pass the $675,000 mark, when a combine alone costs $250,000, he added.
Across the aisle, Rep. Charlie Wilson is also backing the estate tax repeal and was emphatic in his statement to the farm group: “I’m absolutely for the repeal of the death tax,” he said, earning applause from his audience March 12.
“It will come up and my vote will be there.”
Likewise, Rep. Zach Space, D-Dover, offered tentative support and agreed the exemption threshold should be expanded, saying $10 million is “a reasonable figure.”
One of the Ohio-specific issues the Farm Bureau leaders took to Capitol Hill focused on a six-year effort by the Ohio Department of Agriculture to gain authority to issue National Pollution Discharge Elimination System, or NPDES, permits to confined animal feeding operations, or CAFOs.
The effort was supported first by the Taft administration and is backed by current Ohio Gov. Ted Strickland, but is being blocked by the regional U.S. Environmental Protection Agency office in Chicago. ODA officially submitted its application in January 2007.
If approved, Ohio would be the first state to achieve the transfer of permitting from the state’s EPA office to the ag department, although other states’ departments of agriculture have had the permitting authority all along.
And while the NPDES permitting typically applies to large operations, the discharge responsibility applies to all operators, regardless of size, which is why the farm group is pushing for resolution.
The Farm Bureau leaders were hoping to urge legislators to pressure the U.S. EPA to act.
They received a good response from at least one ally in high places.
Want an answer
U.S. Sen. George Voinovich said he was fed up with the U.S. EPA’s silence on Ohio’s request to transfer final authority to the Ohio Department of Agriculture.
“Why aren’t we getting an answer?” Voinovich said, earning appreciative applause from the Ohio Farm Bureau audience in D.C. March 13. “We want an answer.”
Rep. Bob Latta, who served in the Ohio General Assembly for 11 years and supported Ohio’s SB 141 that transferred large-scale farming oversight to the Ohio Department of Agriculture, said he’s found a lot of resistance to the NPDES switch.
“With the climate we’re in, I’m not sure if it’s going to happen or not, to be honest with you,” Latta told the Ohio Farm Bureau leaders.
Several key Ohio Farm Bureau leaders met last week with Benjamin Grumbles, assistant administrator for water at the U.S. EPA, who will ultimately agree or disagree with the recommendation from the Chicago office and make the final decision on Ohio’s petition.
“We gave him a better understanding of our frustration as to how long it’s taking,” said Ohio Farm Bureau President Bob Peterson of Fayette County. “This should not be a six-year project.”
Peterson said the Ohio request is caught in “a bureaucratic maze,” but he’s hopeful the momentum is building. “It needs to be done now.”
The Farm Bureau secured action from several lawmakers. Sen. Voinovich and Reps. John Boehner and Jim Jordan have already sent letters in support of the application, and others have pledged to do the same.
“If we don’t get this done this year, we have failed as an organization,” Peterson said.
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