Farmers in other counties experienced similar increases in 2012 and 2013, but it became a perfect storm this as landowners started receiving notices of their new CAUV values as crop prices began to
Ohio Farm Bureau is bringing together experts to closely examine the complex formula used in calculating CAUV to see if it can be adjusted in a way that provides solutions to the many varied concerns raised by landowners while preserving the integrity and purpose of the program, which is to accurately value farmland according to its current agricultural use value. These possible changes can then be used during the policy development process and for legislative
“The CAUV program has worked very well over the past 40 years and is a program that must be preserved. While the recent increases in values have been anticipated, it doesn’t make them easier to stomach, especially at a time when crop prices are declining,” said Jack Fisher, OFBF executive vice president.
The challenge is how to address the factors that have caused today’s drastic increases in taxes while ensuring that the aspects of this program that have contributed to its long-standing usefulness to farmers remain intact. Farm Bureau is working to make sure that any changes will consider both short and long-term ramifications.
To that end, during its September 2014 meeting, OFBF’s state policy development committee talked extensively about the CAUV formula and heard presentations from three other state Farm Bureaus on how their states’ agricultural property tax programs are conducted and calculated.
These presentations along with other research will be used in next month’s policy development session to formulate policy proposals for consideration at OFBF’s annual meeting in December.
OFBF’s board plans to address CAUV during its meeting later in October 2014.
Over the past year, Ohio Farm Bureau has conducted more than 20 informational meetings and webinars statewide to help members understand the CAUV formula and the reasons for
Additionally, Ohio Farm Bureau has reached out to lawmakers who have been hearing concerns from constituents about rising property taxes on farmland. OFBF conducted a CAUV educational session for members of the Ohio General Assembly and their staff, met individually with numerous legislators and sent a letter to all lawmakers this month making them aware of our research and seeking their input for possible improvements.
Complete this survey by Oct. 31 to give us your thoughts that will provide us with useful information about your CAUV values and local tax. (The survey is closed.)
Why is CAUV important?
CAUV values farmland based on its agricultural productivity, rather than its fair market value. The Ohio Department of Taxation performs CAUV calculations for all 3,500 soil types in Ohio with a slope of 25 percent or less using a formula based on five factors: crop yields, crop prices, non-land production costs, cropping pattern and capitalization rate.
The CAUV formula does not consider the fair market value of farmland, which can be strongly influenced by developmental pressure and demand. On average, the CAUV value still only represents about 35 percent to 40 percent of actual fair market value of farmland. For this reason CAUV is key to ensuring farmers can still work their land. Even with rising CAUV values, most farmers will still see significant savings on their tax bills when comparing the CAUV value of the land to its fair market value.
CAUV is the most effective farmland preservation tool available to Ohio farmers. The program is critical to keeping farming viable and protecting farmland against encroaching development.