By CELESTE BAUMGARTNER

Ohio Correspondent

COLUMBUS, Ohio — Property tax bills for some Ohio farmers have doubled or even tripled, and they are not happy. The Current Agricultural Use Value (CAUV) is the issue, and while changes are on the way, it’s not soon enough for some farmers.

Starting in 2006, crop prices had gone up while interest rates came down, said Larry Gearhardt, field specialist in taxation for The Ohio State University.

“The agricultural economy flourished for the last seven years even though the economy tanked,” he explained. “As long as we have high crop prices and low-interest rates, we’re going to have high CAUV values.”

The Ohio Department of Taxation (ODT) uses a basic income approach to determine the value of farmland based on its ability to produce incomes from typical commercial agricultural products, said Gloria Gardner, assistant administrator of ODT’s tax equalization division.

The Ohio Farm Bureau Federation (OFBF) made recommendations to the department in November, according to Leah Curtis, OFBF’s director of agricultural law. Those recommendations were modernizations to CAUV calculations, and they were small changes within the discretion of the tax commissioner to implement.

“The changes that we had suggested and that were implemented are changing the capitalization rate calculations to consider a 25-year loan term,” Curtis said. “Also, changing the capitalization rate calculation to consider an 80/20 debt equity split – 80 percent debt, 20 percent equity. Also, making sure that the most timely data is in the calculation each year.”

Currently there is a two-year lag for crop prices, and crop yields and a one-year lag for production costs. OFBF suggested eliminating the lag for the production costs and making a one-year lag for crop prices. Those changes should help to tie the values  closer to the farm economy than they are currently.

These values will be finalized in May after OSU publishes the final 2015 crop budgets for corn and soybeans, Gardner said.

Also, woodland values are currently calculated by taking a cropland value and deducting $500 for clearing and $500 for draining. OFBF recommended increasing those deductions for clearing and drainage. The ODT increased the deductions to $1,000 for clearing and $770 for drainage.

These (changes) will go into effect for the 2015 reappraisal year, Curtis said. If a county is on reappraisal or update in 2015, these changes will affect its CAUV values on tax bills in 2016.

“We will hold a hearing in May to discuss the final values,” Gardner said. “The Farm Bureau did mention holding another interim meeting; we just have not discussed that yet. There was discussion about making further changes to the capitalization rate.”

Despite upcoming changes, Gale Lierer and other farmers are not happy. “Last August, and even before, when Roger Reynolds (Butler County auditor) told us that we were going to be in for some big changes, Ohio Farm Bureau did nothing to help us,” said Lierer, who, with her husband, Dave, has a corn and soybean farm.

“We talked to our legislators and they said their hands were tied until Farm Bureau did something. I guess now we might have the ball rolling, but this is not going to help those of us who have already paid their taxes.

“We are stuck with the high taxes, I would say for three years, because Farm Bureau did nothing until now, (Butler County taxes were reappraised in 2014). We had people write letters and complain and they did nothing until now. Some people are not renewing their Farm Bureau dues because of this.”