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Timber Talk 3/27/14

Posted By Denise Foster, Thursday, March 27, 2014
  • ·    Statehouse News.  The following is information on what is going on in the Ohio Statehouse:

o   Capital Budget Released.  The Capital Budget bill is a 2-year bill passed in the year following the state budget bill and contains funding for state and education capital building and major renovation projects (“brick and mortar projects”).  This year’s proposal is for $2.4 billion in spending.  The vast majority of the funding comes from state bonds.  If you are inclined you can take a look at a 12-page spreadsheet summary of spending by agency and/or location on a county basis.  The Ohio Department of Natural Resources is projected to receive a sizable amount of the funding at $236.4 million, much of which is used for ODNR projects while a portion is given to local communities for recreation and resource protection projects.  There is also a proposed $100 million for the Clean Ohio Fund that provides funding for local environmental projects and is matched by local dollars.  Because of budget restrictions in the last several cycles, this is the largest Capital Budget the legislature has reviewed in a number of years.

o   Mid-Biennium Review (MBR).  The review of the budget in mid-way through the 2-year cycle is underway.  This is an effort to make adjustments and changes to the state budget after a year of seeing how the revenues and expenditures projections have played out.  The MBR is divided into a number of smaller bills that are being reviewed by different committees in the House, and there are 14 different measures to the larger bill (see below).  It is expected that each section will have different tracks, some passed quickly, others requiring more review and time, and still others may end up having to start with new measures next session.  The original MBR bill has 50 specific line-item changes in 19 state agencies.  It is proposed that overall spending be reduced $67 million in FY 2014 and another $4.9 million in FY 2015.  Spending for prisons is expected to go up due to burgeoning prison populations.  The following is a list of the various sections of the MBR, the bill numbers and committees each is assigned to:

*  HB 369 (Rep. Robert Sprague - Mental health/drug addiction components), Finance and Appropriations Committee

*  HB 375 (Rep. Matt Huffman - Severance tax), Ways and Means Committee

*  HB 472 (Rep. Jeff McClain - Tax policy), Ways and Means Committee

*  HB 483 (Rep. Ron Amstutz - Appropriation changes and minor policy changes), Finance and Appropriations Committee

*  HB 484 (Rep. Cliff Rosenberger and Rep. Tim Brown - Higher education reform), Finance and Appropriations Subcommittee on Higher Education

*  HB 485 (Rep. Ryan Smith and Rep. Terry Johnson - Creation of the Office of Human Services Innovation), Health and Aging Committee

*  HB 486 (Rep. Nan Baker and Rep. Gerald Stebelton - Workforce development), Economic Development and Regulatory Reform Committee

*  HB 487 (Rep. Andrew Brenner - K-12 education), Education Committee

*  HB 488 (Rep. Mike Dovilla and Rep. Al Landis - Veterans issues), Veterans Affairs Committee

*  HB 489 (Rep. Terry Blair - Lease-leaseback provision), State and Local Government Committee

*  HB 490 (Rep. Dave Hall and Rep. Andy Thompson - DNR/Ag./EPA), Agriculture and Natural Resources Committee

*  HB 491 (Rep. Jim Buchy and Rep. Lou Blessing - Lottery/casino changes), Policy and Legislative Oversight Committee

*  HB 492 (Rep. Gary Scherer - Tax corrective changes), Ways and Means Committee

HB 493 (Rep. Barbara Sears and Rep. Mike Henne - BWC), Insurance Committee

o   Conflicting Revenues Projections for Oil and Gas Tax Revenues.  It appears that the projected revenues from changes in the oil and gas severance tax are markedly different between those from the Administration and those from the legislature, with legislative projections much lower.  Proposed is a 2.75% tax on gross receipts from horizontal shale wells.  The administration is projecting $121 million in FY 2015 and $304 million the following year, while the legislative projection is between $29 million and $80 million in 2015 and the following year from $44 million to $144 million.  Increasing severance taxes continues to be an area of contention between the administration and many Republican members in the legislature and the different projections do not help sorting out the differences.  Part of the difficulty with projections is that the shale industry is relatively new and expanding quickly making projections several years out more difficult due to preliminary data from existing wells that is sketchy at best.  In addition, forecasting prices for oil, gas, and natural gas liquids is also very difficult and open to future “guesses.”  It should be noted that the proposed severance tax increase in the MBR proposal from the administration is currently not included in the bills being reviewed by the various committees.  At this point, the legislature is looking at its own version and the whole effort continues to get much discussion behind the scenes before it is brought to committee.  In fact, some indicate it may be addressed later in the fall session.

o   Renewable Energy Law.  An environmental group, the Environment America Research and Policy Center, released a report saying that Ohio cut carbon pollution by 4.7 million tons in 2012 due to energy efficiency standards from the 2008 Clean Energy bill.  The group says that renewable electricity energy standards reduced carbon pollution equivalent to what is produced from 125,000 cars while energy efficiency standards reduced carbon emissions from the equivalent amount produced by 567,000 vehicles.  The group is arguing that Ohio’s green energy legislation should not be changed as per recent discussion in the Senate to do so.

o   Ohio Unemployment Continues Dropping.  Ohio’s February unemployment rate was 6.5%, down from the 6.9% rate reported in January.  The total number of unemployed workers was 377,000, a reduction of 18,000 from January.  Over the last year, the number of unemployed has dropped by 44,000.  Meanwhile, national unemployment in February was 6.7%, a slight increase from 6.6% in January.

  • ·         OFA Asked to Support Effort to Increase Logging Employment.  A common issue that the wood industry talks about nationwide is the loss of logging capacity and what it could mean to future wood manufacturing productivity.  The recession of recent years took a major toll on logging capacity throughout the United States and many complaints from the industry about too few loggers are heard in many states.  To address that concern, the American Logging Council is partnering with the Forest Resource Association and state associations to promote getting more logging employees.  A key first activity will be the development of a brochure that will be widely distributed and made available in locations that may attract interest of potential workers in the logging industry.  OFA will be listed among the state supporters and will provide information as requested to those wanting to learn more about the logging industry.
  • ·         State Patrol Targeting Truck Overloads in Chillicothe.  According to this article in the Chillicothe Gazette, the Ohio Highway Patrol and the Chillicothe Police Department were targeting overweight trucks in the area last Friday.  The article shows a picture of a log hauler getting weighed road-side.  The article points out an estimate of the amount of money collected from overweight fines and points out that the majority of these funds go to pay for local road maintenance.  With cuts in state funding that have been highlighted by local officials over the last couple of years, it is reasonable to expect more of these “target “areas.
  • ·         Workers Compensation News.  Attached is a letter from CareWorks, the administrator of the BWC OFA Group Rating Safety Program, which briefly explains and highlights the differences between a Managed Care Organization (MCO) and a Third Party Administrator (TPA), indicating the role of each in providing workers compensation services.  An MCO is responsible for medical management of Ohio employers’ work-related injuries and illnesses and are medical professionals.  A TPA assists employers in the administrative and financial aspects of a claim and are typically claims and account representatives.
  • ·         Coalition Letter to Senator Wyden on Saving Timber Tax Provisions.  Congress is looking at tax reform legislation and that is always a time of great uncertainty as good and bad can come from tax reform.  A coalition of forestry interests, including OFA, recently lent a letter (attached) Senator Ron Wyden, Chairman of the Senate Finances Committee asking that current “timber tax” provisions in the code be retained.  The three provisions include current allowance to deduct timber growing costs, allowing timber revenue from sales to be subject to capital gains, and deducting and amortizing reforestation costs.
  • ·         CSAW Chainsaw Training.  There are a number of CSAW chainsaw training classes coming up.  CSAW Level 1 is being offered on March 26 in Middlefield and on April 11 at Deersville.  OFA is cooperating with OSU Extension to begin offering CSAW Training at the OSU Mansfield Campus and there will be CSAW Custom (4-hour) class designed for landowners, volunteers and those with “lighter duty” needs on June 6 and then later in that month on June 20, there will be a CSAW Level 1.   Check-out the Events page on the OFA website to see the list of classes and other planned activities.  You can also take a look at the CSAW page to see what is offered through that training program.  OFA is expanding the CSAW Training schedule to offer more training opportunities around Ohio.
  • ·         Lumber Grading Short Course, June 9-12, 2014.  There will once again be a Lumber Grading Short Course from June 9-12, 2014.  The course will be held at the Yoder Lumber Co. Buckhorn Sawmill in Millersburg.  The course will be taught by NHLA instructor Barry Kibbey.  You can get specific class information and registration material at the OFA website.  You can download a registration form to mail in or you can register on-line.
  • ·         No Report for the Next Two Weeks.  Please be advised that there will be no Weekly Report for the next two weeks.

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