State tweaks CAUV formula to help farmers

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The Springfield News-Sun has continued to follow debate on a decades-old formula used to keep property taxes in check. The paper spoke to area farmers and experts about recent changes in the formula and how that might affect area farmers and residents moving forward.

The state is tweaking a decades-old formula that was designed to help farmers, but has recently led to statewide complaints as farmers’ taxes have skyrocketed.

The Current Agricultural Use Value is a roughly 40-year-old formula designed to keep taxes more palatable for farmers, and to deter them from selling their land to commercial developers. Instead, some Ohio farmers have seen their taxes double or even triple because of how the formula is calculated and an unusual farm economy that has seen record crop prices in recent years.

The changes to the CAUV program will take into consideration more recent crop data, and will eventually lead to more reasonable tax rates for those affected, said Leah Curtis, director of agricultural law for the Ohio Farm Bureau, which helped formulate the changes.

The changes to the formula, enacted late last week, will more closely tie tax values to current economic conditions, as well as more accurately value woodlands, Curtis said.

“There will probably still be increases in value and increases in taxes, but they certainly won’t be quite the burden that they would have been without these changes put in place,” Curtis said.

For example, the state farm bureau estimates cropland valuations will be about 26 percent lower, while woodland valuations will be about 54 percent lower for one type of common soil, compared to if the changes had not been implemented, Curtis said. Part of the CAUV evaluation is based on the type of soil on the property.

Those projections apply only to the property valuations, and not the overall tax amount, which can be impacted by local millage rates and other factors.

The changes will be in place in time for the state’s 2015 reappraisals and updates, Curtis said. Clark, Champaign and Logan counties will all be re-evaluated in 2016, he added.

While he wasn’t aware of the specifics, the changes should help, said Tom Tullis, a local farmer and a member of the Champaign County Fair Board. Many farmers in both Clark and Champaign counties saw their taxes double, and in some cases triple after the most recent assessment.

“I’m not saying it will correct all evils, but it sure helps,” Tullis said.

The formula will remain intact, but the changes will allow more recent data to be taken into account when calculating rates, said Shelley Wilson, executive administrator of the Tax Equalization Division of the Ohio Department of Taxation.

“None of them are structural changes to the formula,” Wilson said. “What they are is basically changes that allow us to collect more current economic information so that use values are as closely tied to current farm income as it can be within the structure of our formula.”

Jim Timmons, a Clark County farmer who grows corn and soybeans on about 2,000 acres of land in Springfield and Green townships., said he saw his taxes at least double. Other issues, like school levies, also contributed to the increase, Timmons said. But the CAUV’s affect is important because many farmers statewide would struggle to break even if something wasn’t done to ease the higher tax burden, Timmons said.

Some of Timmons’ property was taxed at between $25 to $30 per acre in the past, but has recently risen to as much as $70 per acre, he said.

Farmers knew farm values and taxes would rise due to high crop prices in recent years, Timmons said. But the steep tax increases, combined with crop prices that have since fallen, put many farmers into an unmanageable situation, he said.

“You can’t stay in farming for long when you make less than what your bills are,” Timmons said.