Shortly after the Ohio House of Representatives passed the state budget bill (HB 49) that included language to reform Current Agricultural Use Valuation (CAUV), the Ohio Senate started work on the same agenda of reforming old calculations that have been a huge burden on farmers already grappling with lower farm incomes.
On Wednesday, the Ohio Senate approved Senate Bill 36, sponsored by State Senator Cliff Hite (R-Findlay), that would fix recent farmland property taxes that have increased by as much as 300% in some areas of the state.
“Farmers are getting taxed today on calculations that were put in place four years ago and today is certainly not the same as it was four years ago,” Hite said. “Commodity prices are considerably lower and CAUV taxes have spiked to a percentage that farmers can’t handle and its out of their control.”
The goal of the new CAUV language coming out of the Senate would be to make a farmland tax formulation that wouldn’t cause large sways in percentages and would give farmers of all types an idea of what to expect when that tax bill arrives in their mailbox.
The Senate version of a CAUV revamp has a three-year phase-in concept and mentions using USDA statistics to decide specific equity and firm up valuations across Ohio. One of the most important parts of this legislation for Senator Hite is the conservation aspect.
“If a farmer is doing practices to help with conservation efforts in the state of Ohio and they are being taxed as if that land was prime ground, it doesn’t seem to make sense to do conservation tactics, so they might as well plow that land over and make money off of it,” Hite said. “We’ve had farmers banking on the fact that they were doing what is best for the state from a conservation standpoint and they’re being taxed for land that they aren’t using for specific agricultural use.”
This bill would take the lowest taxable level for soil where conservation efforts are being made to protect not only rural Ohio land, but also to ensure water quality throughout the state.
“Farmers have put their best foot forward to try to do the right things in conserving land and making sure our water supply systems are at their peak performance levels,” Hite said. “This bill will incentivize farmers to continue to think that way.”
There are two ways that new CAUV laws will take shape. The newly introduced legislation could be absorbed into the State’s Operating Budget — which must be balanced by July 1— or it could be brought up for consideration in the House of Representatives as a standalone bill. If the latter option is taken, new CAUV calculations would take effect 90 days after the bill was signed. If it is part of the State Budget that is voted on and passed, new formulas will be in place immediately with the passage of the bill.