COLUMBUS — The Ohio Senate Wednesday approved Senate Bill 36, legislation which would update the way agricultural property values are calculated in order to alleviate a heavy tax burden on Ohio’s farmers. State Senator Bob Peterson (R-Washington Court House) was one of the sponsors of the bill.
“This proposal is an important step in addressing tax inequities for farmers and provides more incentive for them to implement meaningful conservation practices that help protect Ohio’s water supply,” said Peterson.
The proposal modifies the Current Agricultural Use Valuation (CAUV) formula, which determines the value of farmland for property taxation purposes, and aims to set a more realistic and stable expectation of taxes owed by farmers. Commodity prices dropped significantly in the last several years while the CAUV formula sent farm property assessments skyrocketing, putting many farming businesses in jeopardy. Recent farmland property taxes have increased by as much as 300 percent in some areas of the state.
Senate Bill 36 also recognizes the efforts Ohio farmers have made in protecting the state’s water supply. For farms setting aside acreage for conservation efforts, the new CAUV policy will ensure the lowest taxable level on that land.
CAUV is a property tax relief program for agricultural land in Ohio. It is the result of a voter referendum from 1973 that allows farmland to be taxed according to its agricultural value, as apposed to full market value. This program is considered a “differential assessment,” a type of tax relief used for agricultural lands in the United States.
The Ohio Farm Bureau issued a statement supporting passage of the bill.
“With passage of SB 36, the Ohio Senate has taken a much needed step to help farmers who have been subjected to extraordinary property tax increases. By reforming the Current Agricultural Use Value (CAUV) formula, the bill will bring relief to family farmers who have seen farmland property taxes increase by more than 300 percent in recent years. These increases have come at the same time that farm income has undergone significant decline.
“The Ohio Farm Bureau appreciates the Senate’s attention to the single most troublesome issue for farmers and landowners. We will continue to work with the Senate and House as they complete their efforts to reform the CAUV formula,” according to the statement.
The bill now moves to the Ohio House for further consideration.