In May, Farm Bureau identified a number of improvements to the CAUV formula that would help stem increases and improve the accuracy of the CAUV calculation and presented those ideas to the Ohio Department of Taxation and the legislature. While Tax Commissioner Joe Testa elected not to make the changes, he had signaled a willingness to work with the legislature.
In an action alert, more than 1,000 OFBF members made contact with legislators asking them to incorporate Farm Bureau’s CAUV changes in the budget bill and prohibit non-farm factors in the CAUV formula. The legislature did not include OFBF’s most recent recommendations in the budget bill citing the need for more time to study the proposal. While Farm Bureau members should reinforce their disappointment with lawmakers over the lack of action taken on this priority issue, legislative leaders and the governor’s office have made commitments to continue to meet with OFBF regarding the proposal.
Farm Bureau is challenging two inaccurate assumptions in the formula’s capitalization rate. The current formula assumes land is held for only five years when in reality farmland is typically held much longer. The formula also assumes land is more valuable as its debt is reduced, but Farm Bureau argued that land values are a function of productive capacity regardless of the level of owner equity. Both changes would lessen the impact of nonfarm market forces on the capitalization rate.
Another proposal asked that all lands in federal conservation programs or other lands managed under year-round conservation practices be valued at the lowest possible rate to encourage practices that protect the environment and water quality.
This latest work on the CAUV formula follows up on successful efforts by Farm Bureau last March to moderate the increases in farmland valuations.