It’s tax season again, and local farmers are concerned by increased property tax bills. Like last year, these increases are caused by structural problems with the Current Agricultural Use Value Formula (CAUV). Since the ultimate fix to this formula can only happen through a vote of Ohioans on the ballot, it is important we take steps in the legislature and at the tax department to make the minor adjustments that can be made while still respecting the Ohio Constitution.
In 1973, voters supported a constitutional amendment that would adjust tax rates for farmers every three years with one third of the counties up for review each year. Because voters placed the citizen-led initiative into the constitution, most of the components of the formula cannot be changed by the legislature. This makes it impossible for a legislative fix to provide the broad relief needed for Ohio’s farmers as grain prices fall.
Recent hikes in the CAUV have been caused by land value increases several years ago that are still included in the formula’s rolling average. This means that while grain prices have gone down, and agricultural land values with them, the CAUV formula still taxes farmers on the prices from a few years ago. When the land values were high and grain prices were up a few years ago, Ohio’s farmers were paying taxes on the lower value from years prior.
The Department of Taxation took some important steps last year, which made positive impacts on future tax bills for farmers, but the remaining concerns have not been addressed, causing the legislature to act.
I have cosponsored a bill to require the Ohio Department of Taxation to establish a more reasonable capitalization rate and publish it annually, as well as provide a break to farmers who have placed their land in set-aside grants and no longer benefit from farming it. There is also a proposed amendment to the bill that would benefit those whose land contains woodland by reducing their CAUV rates.
Updating a law that is nearly 50 years old is important. Unfortunately, the best changes require changing the Ohio Constitution, which requires a citizen-led initiative and a vote by Ohioans. I support the small steps the legislature can take because they are a calculated and balanced approach to helping our farmers.
I know that when we keep taxes in Ohio competitive, we attract business and encourage job growth. This approach is important for economic success in Ohio. Ohio’s farmers are better equipped to invest these tax dollars than bureaucrats in Columbus.
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The writer represents the 84th District in the Ohio House of Representatives.