Ohio farmers: Stop property-tax change

By KELLI WYNN

Dayton Daily News

DAYTON

Dayton-area farmers are asking state legislators and the Ohio Department of Taxation to change a formula that they say is causing their property taxes to increase significantly this year.

Farm advocates say a combination of falling crop prices and historically low interest rates have caused the formula to spit out historically high agricultural land values.

The Current Agricultural Use Value formula, which allows farmland to be taxed on its agricultural productivity rather than its development value, will be the topic of discussion for the CAUV Legislative Roundtable Forum on Monday.

The Ohio Farmers for CAUV, a local grass-roots organization, says farmers are the target audience for the forum, said Bruce Kettelle, organization spokesman.

Some state legislators are scheduled to attend.

Under the state taxation department’s definition, the CAUV formula works by permitting values to be set below true market values, which normally results in a substantially lower tax bill for working farmers.

Formula factors include crop yields, crop pattern, crop prices, and capitalization rates, according to the state taxation department.

Kettelle and Duane Plessinger, another organization spokesman, said the CAUV was designed to keep farmers from being overtaxed. Plessinger and Kettelle want to keep the CAUV formula, but are asking state leaders to make changes to the formula that would not significantly raise the property taxes for the farmers.

He said increase forced some farmers to choose between paying the taxes or buying fertilizer and seed.

“It’s a tremendous amount that’s increased, so we’re trying to impress upon the legislators that the tax is too much,” Plessinger said.

Property taxes for the farmers affected by the CAUV formula have increased because the CAUV factor is based on old data, according to Gary Gudmundson, spokesman for the Ohio Department of Taxation.

“What the data is reflecting is, back a couple of years, crop prices were going through the roof. They were making a killing.” Gudmundson said. “Jump a head a couple of years and crop prices have declined pretty significantly, but the values are based on a period in time when crop prices were high. So the taxes are paid on these high values from two years ago, but the actual prices that farmers are receiving for their crops today is a lot lower.”

Last year, the Ohio Farm Bureau Federation presented the Ohio General Assembly and state Tax Commissioner Joseph Testa recommendations to change the formula, according to Joe Cornely, OFBF spokesman.

Those recommendations included linking tax values to current economic conditions in agriculture, having more recent data on crop mix, prices, yields and production costs and having the formula better represent the true value of woodlands compared to cropland.

Gudmundson said the state doesn’t have any plans to change the formula.

“Back when they were making lots of money on [crop] prices, their [property] values were abnormally low,” Gudmundson said.

He said the property values of these farmers could change in the future, depending on what happens with the crop prices.