Ohio Farm Bureau members spoke from the heart this week when testifying in favor of Senate Bill 246, which encompasses some of Ohio Farm Bureau’s recommendations to make the Current Agricultural Use Value (CAUV) program more accurate.
SB246 would require that the computation of the capitalization rate for CAUV values use a method that excludes appreciation and equity buildup. Ohio Farm Bureau has been challenging two inaccurate assumptions in the CAUV formula’s capitalization rate: that land is a short-term investment and that it becomes more valuable as its mortgage is paid down. Brandon Kern, OFBF’s director of state policy, spoke at length to members of the Senate Ways and Means Committee, on how the CAUV formula works, how farmers have been impacted by recent increases in CAUV and how changes are needed to the capitalization rate and conservation land valuation to make the formula more accurate.
“It is our intent for our family to continue farming this land for future generations. When most farmland is held in the family for generations, not years, equity buildup is not realized,” testified Val Jorgensen, owner of Jorgensen Farms in Westerville.
Jorgensen (in above photo) also talked about the family’s extensive conservation efforts to protect a nearby creek.
“It would be very hard to put in place these practices if we are continued to be taxed at our normal CAUV rate,” she said. “Changing the valuation of land in these practices to account for the fact there is no agricultural production taking place on them would allow us to do more to protect the waterway and the long-term soil health.”
Kurt Garver of Butler County talked about how rising cash rent land prices have impacted farmers. Landlords have been raising rental costs to offset their tax increases, and if they can’t find farmers who can afford to pay more, sometimes they sell the property for development, resulting in the loss of more farmland.
“CAUV has helped our family to be able to continue to do what we love in an area that we call home where taxes continue to steadily rise,” Garver said. “Continual increases in taxes and input costs together may jeopardize our generational operation for my wife, our children and our families.”
OFBF State Trustee Lane Osswald pointed out that over the past couple of years, Ohio Farm Bureau has done an extensive review of the CAUV formula and is not asking for “arbitrary decreases in farmers’ taxes.”
“The recent situation has led us to study CAUV more closely than we ever have before and uncover elements of the formula that could provide a more accurate valuation in the modern day farm economy,” said Osswald of Preble County. “As an Ohio Farm Bureau board of trustee member, I believe the targeted changes in SB 246 will help us achieve these needed improvements, eliminate factors that have led to unsustainable property tax increases and uphold the integrity of Ohio agriculture’s most important program.”
Adam Sharp, OFBF’s vice president of public policy, said he appreciates farmers taking time out of their busy schedules to testify in Columbus.
“Having farmers talk about how CAUV affects their business and livelihood puts a real face to the issue, and it’s great to see how involved our members have been with this important issue that affects so many people across the state,” he said.