2022-23 Oregon Wine Board Budget Proposal

Below is a summary of the draft budget to be reviewed by the Oregon Wine Board of Directors at their public meeting on March 3, 2022. An additional meeting is scheduled on February 8 with regional winery associations to review draft budget details and gather additional industry feedback. If you would like to provide comments on this draft budget directly for consideration please email them to marie@oregonwine.org by February 18, 2022.

Click here to view the 2022-23 Draft Budget Proposal Document Posted on February 1, 2022

 

SUMMARY

The Oregon Wine Board adopts a budget each year in March to allocate funding for programs and general and administrative expenses for the next fiscal year. The Oregon Wine Board reviews the proposal in an open, public meeting and, with their endorsement, it is also sent for approval by the Director of the Business Oregon Commission.

This 2022-23 draft budget summary includes an 11% revenue reduction and a 10% expense reduction from the prior year’s approved budget.

Click here to view the 2022-23 Draft Budget Narrative

REVENUE ASSUMPTIONS

Grape Assessment and Wine Tax

Since it is difficult to predict the results of the grape harvest for all regions of the state a year in advance, the OWB relies on the past 3-year average assessment as a preliminary revenue number. As it is needed to reflect more accurate harvest figures, the OWB occasionally develops an adjusted revenue and expense forecast in the fall or winter, for the remainder of the year. When submitted by the Finance Committee, budget adjustments are approved by the Board of Directors in regular, public meetings. The wine tax is also projected at a 3-year average.  For the 2022-23 annum, the tax rates are as follows and paid directly to the OLCC:

• Grape Assessment:
  • $25/ton tax on grapes harvested in Oregon and used to produce wine
  • $25/ton tax on grapes imported into the state and used to produce wine
  • $25/ton tax on wine produced from juice or concentrate
  • $12.50/ton tax on wine grapes sold to businesses outside of the state
  • $0.021/gallon tax on wine made from all other agricultural products (i.e. cider)
• Wine Tax:
  • $0.02/gallon tax on wine sold within the state of Oregon (the first 40,000 gallons sold annually in Oregon are exempt for wineries producing less than 100,000 gallons annually in-state). The $0.02/gallon transferred to the OR Wine Board is a portion of the $0.67 per gallon in total tax paid by wineries on which the tax is levied

BUDGET DEVELOPMENT

This budget was developed over the following timeline and with monthly opportunities for seeking and gathering feedback from industry and board members on budget priorities and programs.

October	Industry survey release and responses gathered
November	Nov 2 – Gather initial input on programming and budget from regional associations Review association feedback at the finance/executive committee meeting and assess further follow up
December	Dec 1-2 – Review association feedback with the board directors and gather any additional board guidance
January	Staff finalize plan development and make draft budget recommendations Verify OLCC transfer of first half 2021 harvest tonnage tax and make any necessary adjustments to 2022-23 income projection Jan 25 -Develop a complete draft budget and review with the finance/executive committee
February	Feb 1 – Post the draft budget for public comment Feb 8 – Host budget review meeting for regional associations to collect any additional feedback Make any necessary adjustments from public forums and review the final draft with the finance/executive committee
March	Mar 3 – Submit the final draft budget to board for approval Apr 1 – Submit the approved budget to Business Oregon for final approval

BUDGET PRIORITIES

• Oregon Wine Symposium reflected as break-even on direct event costs
• The budget reflects strategic investments in:
  • Viticulture and Enology Research
  • Community Benchmark/WISE Academy (offset by grant funds)
  • Industry Education/Oregon Wine Symposium (offset by ticket sales and sponsorship)
  • Oregon Wine Month (including new merchandising support effort)
  • Tourism promotion through an Oregon Wine Touring publication
  • Communications programming to drive more PR
  • Launching a redesigned consumer website to support wine tourism (partially offset by grant funds)

• Overall compensation (including benefits) budget increase of 5%
  • The current inflation rate shows at 7%
  • Overall budget level consistent with last year’s budget

2022-23 YEAR-END RESERVES

It is the policy of the Oregon Wine Board, as adopted by its directors, to reserve an amount equal to 30% of the prior three-year average grape assessment income for the purpose of covering expense commitments should the annual harvest be limited. The OWB also maintains access to a line of credit in the amount of $100,000 for the same purpose. The effect of the 2020 harvest continues to impact the OWB’s tax income level, requiring access to the reserve funds. The reserve goal for this budget is $496,838, which reflects an decrease of 12% from the prior year. This budget expects to utilize $306,731 of the reserve goal balance, leaving the total year end reserve and surplus is equal to $190,107. OWB predicts income levels will approach historic levels in the future allowing it to restore the reserve.

If you have any questions, comments, or desire more detail on this budget proposal, please email marie@oregonwine.org.