COLUMBUS, Ohio — In a letter to the Ohio Department of Taxation (ODT), the Ohio Farm Bureau Federation (OFBF) offered a second set of recommended changes to the Current Agricultural Use Valuation (CAUV) program.

OFBF hopes these changes will result in more accurate valuations it says reflect the economic conditions landowners are facing.

The tax department is already expected to put into practice changes to the CAUV formula suggested by OFBF in March at an Agricultural Advisory Committee meeting.

Those changes and the second set can all be done administratively, rather than legislatively, said Leah Curtis, OFBF director of agricultural law. The Bureau asked the state to consider putting this second set of changes into effect for the 2015 reappraisals, she said.

"We just received this last batch of proposed changes from OFBF last week," said Gary Gudmundson, communication director at the ODT. "We’ve not had a chance or time to fully digest and analyze them. We don’t expect to get that done before this May 28 hearing where we release the CAUV values for the year.

"We don’t anticipate any further changes this year, though we absolutely will give full and fair consideration to this most recent group of suggestions."

Farm Bureau’s three recommended changes are:

•Using a different method for calculating the capitalization rate, which is one of the factors in the CAUV calculation, Curtis said. OFBF suggested using a method that would take out the many non-farm influences currently being used to calculate the capitalization rate.

The current formula assumes land is held for only five years, when in reality farmland is typically held for decades. The formula also now assumes the land is more valuable as its debt is reduced. OFBF argues land values are a function of productive capability regardless of the level of owner equity.

•Placing all CAUV land that is in a year-round conservation practice or in the federal conservation program at a minimum value.

•In March, the ODT increased conversion cost deductions for woodland values but OFBF feels they are still too low, Curtis said.

"Originally it was $500 for clearing and $500 for drainage," Curtis explained. "The tax department in March announced that they would go to $1,000 deduction for clearing and a $770 deduction for drainage ... Clearing costs are much higher than that, and that should be reflected in that conversion cost that is being deducted from the soil value."

None of these new changes, if they are enacted, nor the changes enacted in March will lower a farmer’s property taxes until a county’s next reappraisal, which happens every three years. That would require a legislative change.

"The issue of legislative versus administrative is one that the department is interested in exploring – what the most appropriate route to take to reform CAUV, if that even is the goal," Gudmundson said. "The CAUV system has worked very well for the agricultural community in Ohio or a long time.

"This most recent time period, I think everybody acknowledges, has been a bit of a culmination of factors that have caused the system to operate differently than it has in any most recent memory," he explained.

However, there is still a significant reduction in taxes afforded to the agricultural taxpayer, Gudmundson said. So, there a sense that whatever changes might occur should be approached with care and caution because the system has worked effectively.