Staying with the story
The Springfield News-Sun has continued to follow debate on a decades-old formula used to keep property taxes on farms in check. The newspaper spoke to area farmers and experts about recent changes in the formula and how that might affect Clark and Champaign County farmers and residents moving forward.
Ohio legislators recently introduced two bills to adjust a decades-old formula meant to encourage farmers to preserve farmland after an unusual combination of factors caused farmers’ taxes to spike statewide.
The Current Agricultural Use Value was designed to lower tax rates for farmers and deter them from selling off land to commercial developers. But because of how the formula works, 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.
Earlier this year, state officials tweaked the formula to more closely tie tax values to current economic conditions. The current proposed state bills would make further changes that would encourage farmland used for conservation at the lowest possible rate. The bills would also prohibit using assumptions built into the formula that assumes the land value appreciates.
Tom Tullis, a Champaign County farmer, wasn’t familiar with the newest legislation. But he said farmers throughout Clark and Champaign counties have seen their taxes spike in recent years. Most have been able to manage due to a mix of falling fuel costs, excellent crop yields and stable prices for items like fertilizer.
“There were several little things that helped, but next year will tell the tale,” Tullis said. “If we don’t get a good yield next year with the prices where they’re at, it’s going to be a tough one.”
Both the House and Senate versions of the bill are the same, said Ohio Sen. Cliff Hite, R-Findlay. If the legislation is approved, land used for conservation, like woodlands and wetlands, would be assigned the lowest possible tax value based on the soil type. That’s not the case now.
The current rules encourage farmers to convert property into crop land because it’s currently taxed as if it were producing crops, he said. It will also lower taxes for farmers.
“It’s not so much about commodities, it’s about land preservation,” Hite said. “That was the idea of CAUVs in the first place, to make sure that we preserve this great farm land for our No. 1 industry.”
The Ohio Farm Bureau proposed a set of recommendations in May, but those were never implemented, said Leah Curtis, director of agricultural law for the Ohio Farm Bureau. House Bill 298 and Senate Bill 246 would implement most of those recommendations if approved, she said.
“It would make for a more accurate calculation for the long term,” Curtis said. “We want to make sure that our program is doing what it is supposed to do, which is to value farmland for agricultural purposes only and using only agricultural information.”
There may be a debate about the issue because the changes could impact tax revenue for local schools, for example, Hite said.
But it’s a debate worth having, he said. The formula is still beneficial to farmers despite the recent spike in taxes, he said. The challenge will be to find changes that can benefit farmers in the short term, but still don’t do anything to make it less effective years from now.
“We’ll have an interesting debate throughout this process, but I think it’s the right thing to do,” Hite said.
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