Clark, Champaign County farmers to see changes in property tax bills

The recently approved state budget included reforms to a decades-old formula that Clark and Champaign County farmers said will eventually provide some relief to property tax bills that in some cases have shot up as much as 300 percent in recent years.

Agriculture contributes $105 billion to the Ohio economy and accounts for one in seven jobs in the state, according to information from the Ohio Farm Bureau.

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The Current Agricultural Use Value was initially designed to keep property taxes manageable for farmers and deter them from selling land to commercial developers. But a combination of record crop prices in past years and higher land values instead caused taxes to double and in some cases even triple for Ohio farmers.

Some local farmers said they’re optimistic that reforms included in the new state budget will provide more stability for the foreseeable future.

“No matter how you look at it it’s going to help us,” said Jeff Adams, who saw an increase of $20 per acre on property he owns with his wife. “For any landowners it’s going to help, whether it’s the 70-year-old widow or the guy who owns 40 acres and hobby farms.”

Adams farms in parts of Union, Madison and Champaign counties.

The changes made will more closely tie the capitalization rate in the formula to realistic farmland values, as opposed to the general economy, said Leah Curtis, director of agricultural law for the Ohio Farm Bureau, which helped formulate the changes.

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The reforms, along with a few recent tweaks to the formula, are expected to lead to an average savings of up to 30 percent for 2017 assessments, she said. The reforms will also remove a penalty for placing land in conservation practices that protect water quality, she said.

The reforms will be phased in over two reassessment cycles, or six years, which Curtis said will allow more time for local communities and schools to adapt to the new formula. Some critics have raised concerns that lowering taxes on farmland in the program would be partially offset by higher taxes on other property, including residential taxpayers.

READ MORE: Farmers face skyrocketing taxes, increases could affect schools

But Curtis said the reforms will be phased in, allowing communities more time to adjust. Clark and Champaign counties were most recently assessed in 2016, so the change will most likely be noticeable at the next assessment in 2019, Curtis said.

“There will be a little bit of time before they see the changes in the formula come into play on their tax bills,” she said of local farmers.

The reforms will be fully implemented for all counties after the 2022 reassessment, according to information from the Ohio Farm Bureau. Curtis said the reforms included in the budget addressed most of the farm bureau’s major concerns.

DETAILS: Clark, Champaign farmers seek tax relief

“Certainly from our perspective what we have been striving for is to try to make this formula be as accurate as possible and we think that is achieved with these changes,” Curtis said. “We’re making sure the calculation is focused on data that is relevant to the farm economy and what’s actually happening on the farm rather than arbitrary assumptions that were made beforehand in the calculation.”

The Ohio Department of Taxation is expected to implement the changes over the next several months, she said.

Clark County farmer Brian Harbage said he hasn’t followed the language included in the recent state budget, but said he’s also seen his tax bill spike and is optimistic the changes will provide some relief in the next couple years.

When the bills spike, there’s not much farmers can do other than try to pay the bill and move forward, he said.

“You’re going to have to get more out of every acre of crop to pay these taxes,” Harbage said. “It just decreases our profitability.”

By the numbers

300 percent — Increase some farmers have seen in their property taxes in recent years

$105B — Value of Ohio’s agricultural industry

1 in 7 — Jobs in the state tied to agriculture

Staying with the story

The Springfield New-Sun has provided extensive coverage of the farmland tax formula and efforts to make changes to how farms are taxed.

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