Late on June 30th Governor John Kasich signed Ohio’s operating budget. Included in the budget was changes to the state farm land tax program. Over the last three years, Ohio Farm Bureau and Ohio Farmers have been working to make changes to the tax policy. In recent years, farmers have seen increases up to 300 percent in taxes for farmers and landowners.
Farmers and Rural communities will benefit from the reforms of the state’s farmland tax policy. Throughout the process Ohio Farmers have testified in favor of the changes saying that it will keep them on the land for years to come. The reforms to the CAUV will tie farmland taxes to actual farm income. Also, it will address the formula issues that increased taxes by up to 300 percent.
The reforms will remove certain non-agricultural factors such as equity buildup in the capitalization rate, and will tax qualifying conservation ground at the lowest taxable value for soil types.
“It’s taken three years of grassroots action to fix the flaws in the CAUV formula, and our members should be proud of this significant accomplishment,” said Ohio Farm Bureau Executive Vice President Adam Sharp, in a released statement. “We also want to thank the legislators who listened to our Farm Bureau members,” he said.
Ohio Farm Bureau believes that these changes could results in a 30 percent average savings.
These changes didn’t happen without concern from many around the state. With the changes in property tax comes decreased funding for local schools and county governments. This was the biggest concern when making the changes to the CAUV and was one of the main hangups over the past several years. School districts could face losses of $18 million and county governments even more. The reform will be phased-in over the next two reassessment cycles which means over the next 6 years. The hope is that this will give schools and local governments time to adjust to the changes.
In regards to the possibility of losing close to $20 million a year for school districts around the state, Damon Asbury with the Ohio School Boards Association understands the challenges the CAUV tax causes for farmers but he also thinks lawmakers may be rushing into a solution.
“What we do have concerns about is what would appear to be a relatively rapid change without understanding the implication for both schools and local government and other taxpayers because the way the Ohio tax structure is assigned when one taxpayer pays less, others will pay more,” said Asbury.
As changes take effect around the state there will be many different opinions as to if this change is good or bad. One thing is for sure, property taxes will be changing for everyone one way or another. Get to know what this means for you personally so you understand what it can mean for you.
Sources:
http://ocj.com/2017/07/ohio-agriculture-celebrates-cauv-reforms-included-in-state-budget/
https://www.farmanddairy.com/news/ohio-budget-countdown-concerns-farm-groups/428580.html
http://statenews.org/post/cauv-battle-farmland-valuations-vs-school-funding