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Ohio farmers face tax hike in voluntary program, for 2015

 

 

By DOUG GRAVES

Ohio Correspondent

 

COLUMBUS, Ohio — The Ohio Department of Taxation has a program called Current Agricultural Use Value. That program, known by farmers simply as CAUV, is designed to make farming financially easier for operators.

According to some, that may not be the case this year. "Sticker shock is a very good way to describe this," said state Sen. Bob Peterson, a Republican from southwestern Ohio who farms about 2,000 acres in Fayette County.

He explained the program calculates with farmland values based on crop yield, soil conditions and market prices. But low interest rates and swings in grain prices are revealing imperfections in the formula and adding up to higher property taxes next year. Most of Ohio’s 75,000 farmers take part in the voluntary program because it saves them thousands of dollars annually.

The formula used by the program is based on a rolling seven-year average of crop prices, soil values and other measures of farm productivity. The higher bills are based on past performance.

Bill Cox, a farmer in Delaware County, said the formula should be adjusted to better reflect current conditions, rather than what happened years ago. His property tax will rise from $2,446 to $5,412 next year. "The money we get for our crops this year pays for our taxes next year," he said. "If they’ve got a formula, they’ve probably got some third-grader working on it."

Amy Milam, director of Legal Education at Ohio Farm Bureau, said her organization is trying to gather as much information as it can on the tax formula before creating a policy proposal by the end of the year.

"We certainly empathize with those members who are alarmed and concerned," she said. "They’re seeing this higher valuation now, when the farm economy isn’t as good as it was. Some are just wondering if there’s a need to review some of the methods for the formula.

"We’re always evaluating this formula. This year, we’re just intensifying the examination."

The tax program historically has been incredibly popular with farmers because it makes farm property values a fraction of the general market rate. In 2013, the average value of farmland in Ohio under the program was 38 percent of the market value, according to the Ohio Department of Taxation (ODT). In Marion County it was 78 percent.

But farmland values in the program have more than tripled since 2010, when the average value per acre was $505. The average value for this year was more than $1,600 per acre, according to the ODT. Record low interest rates and recent high crop prices have caused a recent spike in farm values, according to Farm Bureau.

The increases in value hit farmers across the state at different times, as each county is reappraised every six years and updated halfway between appraisals. Marion County was reappraised in 2013.

Milam said the Bureau is seeking input from farmers, who are encouraged to take a survey with the organization giving details about their tax bill changes. The accumulated responses, which are due Oct. 31, will be used in the state organization’s policy session in November to prepare formal proposals for the Farm Bureau’s annual meeting in December.

10/29/2014