Ohio farmland tax valuations continue to decline across the state according to a new study from Ohio State University. The study shows tax valuations have dropped by one third since the Current Agricultural Use Value formula was changed by the state legislature in 2017. Ohio Farm Bureau led the effort to make valuations more reflective of current farm economic factors.
Before the formula change, the average tax valuation of land in Ohio was $1,310 per acre. After the change, the average valuation was $875 per acre, according to the study done by agricultural economists Robert Dinterman and Ani Katchova with OSU’s College of Food, Agricultural, and Environmental Sciences.
Agricultural land values and the corresponding taxes paid on that land will continue to decline at an even faster rate, Dinterman said. Steeper decreases in taxes will be seen, on average, because the changes to the way the farmland is assessed have been phased in between 2017 and 2019. Small changes were made each year to avoid a sudden and dramatic drop in tax revenue, Dinterman said.
But in 2020, the phase-in will end, so Ohio farmland owners should see another one-third drop in the assessed value of their land, compared to the previous year, and similar declines in their taxes, Dinterman said.
The average tax paid across the state was about $36 per acre of farmland in 2016. That dropped to around $31 in 2017, Dinterman said. By 2020, the average likely will be around $25 per acre, which would match the rate paid in 2011, he said.
The legislative adjustment to the CAUV formula followed three years of grassroots efforts by Farm Bureau members who asked lawmakers to respond to dramatically higher farmland taxes at a time when the farm economy was slumping.
“Ensuring that farmers have accurate property tax values is integral to preserving farmland in our state,” said Ohio Farm Bureau Policy Counsel Leah Curtis.
Another Farm Bureau promoted change is also paying off, she said.
“The penalty on farmers who place land in conservation practices has been eliminated,” Curtis said. “Conservation lands are now being taxed at a lower rate, which helps farmers continue their efforts to protect water quality.”