OFB Predicts ‘Perfect Storm’ as CAUV Values Skyrocket
Bill Patterson, co-owner of Patterson Fruit Farm and president of the Ohio Farm Bureau, said the county’s farmers are facing rough financial weather, as property values currently used for agricultural purposes are expected to increase between 110% and 120% around the state.
Bill Patterson, co-owner of Patterson Fruit Farm and president of the Ohio Farm Bureau, said the county’s farmers are facing rough financial weather, as property values currently used for agricultural purposes are expected to increase between 110% and 120% around the state.
“OFB has a significant concern,” he said Oct. 12. “I believe 41 counties are being revalued this year — those 41 counties in particular are facing kind of a perfect storm.”
According to the Ohio Department of Taxation, farmland devoted exclusively to commercial agriculture is valued according to its current use rather than at its “highest and best” potential use. This means crop production is incentivized in some areas by applying a formula to determine a property’s Current Agricultural Use Value.
“By permitting values to be set well below true market values, the CAUV normally results in a substantially lower tax bill for working farmers,” the ODT website said.
The system was first implemented after Ohio voters approved a 1973 constitutional amendment to allow farmland to be valued at its CAUV rather than its fair market value to encourage agricultural use and discourage sale to land developers.
CAUV values are established according to soil types and Patterson said the most common soil type in Geauga County is expected to increase roughly 110% in the re-evaluation.
An earlier version of the attempted fix was included in the state budget bill in June, but stripped out before passage. Instead, a committee was created to reexamine the problem, which was a move the OFB supports, Patterson said.
In an August episode of her podcast “Legal with Leah,” OFB policy counsel Leah Curtis said CAUV values have consistently stayed well below market values throughout the years, but now the effects of a very strong economy are being felt.
“Particularly, those (effects) are strong crop prices and crop prices that were not only strong, but sustained over several years,” she said. “Most of our data sets in the formula use seven years of data. So, we’re looking at 2017 to 2023, and that has resulted in significant increases in the CAUV soil values.”
Curtis said OFB participated in a significant reform to CAUV calculations in 2017, with an aim to remove nonagricultural factors in the formula at that time, which she said drove up values based on the capitalization rate on farmland.
“Now, we’re seeing values largely driven up by the actual crop prices and the ag factors. But, we do know that that spike in value and how that creates a spike in your taxes, that is the main concern,” she said, adding OFB is working multiple channels to address these concerns.
“We’re doing our continued review of the formula. We’re meeting with the tax department as to those concerns and also the (Ohio) legislature recently passed, in the 2023 budget, a joint committee on property taxes,” she said. “So, we do intend to be heavily engaged with that and we will be advocating for our own policies not just on CAUV, but on property tax in general for our members through that committee process, as well.”
Patterson said Geauga County’s farmers want to make sure the reevaluation accurately reflects agricultural property values.
“We don’t want more than what we deserve, we don’t want less than what we deserve,” he said. “Let’s make sure we’re reflecting the purpose of what was passed in the constitution 50 years ago”
