The 2016 tax season is quickly upon us, and for many farmers in our community it means bracing for another alarming CAUV tax bill. My office has received many constituent phone calls, which we have been more than happy to answer.


First, it’s important to start with the history of this program. Starting in the 1970’s, Ohio voters adopted a tax formula called the Commercial Agricultural Use Value, or CAUV. This formula significantly reduces the property tax on farmland in an effort to help farmers afford and preserve their land. By preserving as much farmland as possible, it addresses the national security issue of ensuring food is available and affordable for consumers.


Many farmers in Ottawa and Erie counties have seen their property-tax bills increase in the latest round of tax collections. This is due to the CAUV formula which includes profits from several years back that were much higher than the 2014 and 2015 yield. This significantly skews the average, causing the property tax rate to soar while the farmers’ income declined.


As an agricultural community, Ottawa and Erie County farmers have felt the impact of inflated CAUV first hand. For many, this was a surprise that they were not able to account for and it is causing farmers to struggle to make their payments. It is clear that the legislature should look at how the CAUV formula is structured; however the solution involves a delicate balancing act with the residential property tax.


Neither the Ohio Constitution nor current law prescribes the specific method for determining CAUV values. Instead, current law requires the Ohio Tax Commissioner to adopt a method by administrative rule that "reflect[s] standard and modern appraisal techniques that take into consideration: the productivity of the soil under normal management practices; the average price patterns of the crops and products produced to determine the income potential to be capitalized; the market value of the land for agricultural use; and other pertinent factors."  The method adopted by the Commissioner is published annually in CAUV "land tables," which applies to CAUV land in counties undergoing reappraisal that year and continue to apply in those counties for the following two years until the next reappraisal or update year.


To address farmers’ concerns, the Ohio House has introduced House Bill 398, which requires a component of the CAUV formula cannot include escalating land value and owner equity, thereby enhancing the economic value of land. The bill will also place a ceiling on the taxable value of CAUV land that is used for conservation purposes, effectively reducing the taxable value of that land not currently valued at the lowest-valued soil type. House Bill 398 has been referred to the House Government Accountability & Oversight Committee for consideration. It is clear that we must work together with the agriculture community and listen to their suggestions regarding a CAUV fix.


While I continue to evaluate this issue and help find a solution for our Ottawa and Erie County agricultural communities, I would appreciate your input on this and all state legislative matters. Please feel free to contact my office at (614) 644-6011 or Rep89@ohiohouse.gov.


 

 
 
 
  
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