This week, the Ohio House of Representatives passed HB 49, the state budget bill, that included language to reform Current Agricultural Use Valuation (CAUV).
There have been few more discussed topics in Ohio agriculture in recent years than the skyrocketing farmland property tax increases
Ohio’s farmers have experienced farmland property tax increases, in some cases reaching 300% in each of their past two to three triennial valuations. At the same time, struggling commodity prices dropped farm income dramatically.
“Farmers are getting tax bills that are many times what they were less than 10 years ago and at the same time experiencing lower prices for their crop,” said Todd Hesterman, Ohio Soybean Association president and Henry County soybean farmer. “Reform is needed to create stability for family farmers.”
The proposed changes include that the interest-capitalization rate used in the formula will be modified to lessen the influence of non-farm factors and be phased in over six years.
The bill will also remove disincentives for farmers to engage in conservation practices by stipulating that CAUV land enrolled in a federal conservation program for at least three years be valued at the lowest possible based on soil type.
Ted Finnarn, Ohio Farmers Union attorney and 41-year member of the Ohio Dept. of Taxation’s Agricultural Advisory Committee said what the House is proposing “will return the CAUV calculations to more reasonable values and allow conservation acres to be taxed at lower rates since these acres do not produce any crops.”
“The interest-capitalization rate used in the formula will be modified to lessen the influence of non-farm factors by increasing the holding period from five to 25 years,” Finnarn said. “These changes, resulting in lower CAUV values, will be phased in over two re-evaluation cycles, so that they do not cause any dramatic impacts to local governments and schools.”
The Ohio Farm Bureau has been working with legislators for years on making adjustments to the formula and supports the CAUV changes as well as the also supports the budget bill’s funding for OSU Extension services, agricultural research and development and Soil and Water Conservation Districts. These services provide important science-based information that benefits the farm and food community. The Ohio Senate will now take up and review the budget, including the CAUV reform language, making their own changes and amendments. The budget debate is projected to continue into late June.
“Ohio’s family farmers appreciate the inclusion of CAUV reform in the budget bill passed today by the Ohio House…The bill also ensures that farmers are not penalized for adopting conservation practices that protect water quality,” said the Ohio Farm Bureau Federation in a statement. “OFBF thanks House members for being responsive to the needs of the farming community.”