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State senate joins House to reverse farm-tax values

By Jim Provance • May 11, 2017 at 1:40 PM

COLUMBUS — The Ohio Senate added its voice Wednesday to efforts to reverse the tax values of agricultural land that farmers contend have been artificially inflated by an out-of-date formula.

Senate Bill 36 would alter how the value of farmland and land set aside by farmers as woodland and buffers is determined.

“Farmers work with a narrow profit margin,” said Sen. Cliff Hite (R-Findlay), the bill’s sponsor. “Some of those in farmland have had their taxes raised anywhere from 280, 300, to 350 percent. That is unmanageable. … There’s no way that you can save not knowing that a spike like that is going to hit you.”

The Senate bill takes a few steps closer to what the House recently added to the proposed two-year state budget it has sent to the Senate.

The Senate bill passed unanimously, but Democrats say they worry that a reduction in farmland values could put an $18 million hole in school budgets.

“There’s no doubt this action is necessary, but to put some of the burden on the school districts may be the straw that broke the camel’s back in some school districts,” Sen. Joe Schiavoni (D-Boardman) said. Other local governments could face a loss of $17 million a year.

Sen. Bob Peterson (R-Sabina) suggested the $18 million annual figure may be too high, given that the changes in the bill would be phased in over three years. The changes in the House budget would be phased in over six years to spread out the pain.

“This is slightly different, not drastically different,” Hite said. “We do like what the House did. We’re not changing their concept.”

A 1973 constitutional amendment sought to protect productive agricultural and noncrop producing woodlands and conservation areas by basing their land values, and therefore their local property tax bills, on their true uses rather than their higher potential value for commercial or residential development.

A complicated formula, calculated by the Ohio Treasurer’s office, takes into consideration, among other things, farm income based on soil type and price data on selected crops, land-production costs, and property equity.

Farmers, though, say that outdated data for commodity prices, along with artificially low interest rates, have driven up farmland property values.

“These increases have come at the same time that farm income has undergone significant decline,” said the Ohio Farm Bureau. “S.B. 36 also ensures that farmers are not penalized for adopting conservation practices that protect water quality.”

Like the House version, the Senate bill would require calculations of the Current Agricultural Use Valuation to be based more on U.S. Department of Agriculture data.

It remains to be seen whether Senate Bill 36, which now goes to the House, or the state budget will be the vehicle that sets the new CAUV formula. A final budget must reach Gov. John Kasich’s desk by the end of the fiscal year on June 30.

“Farming is Ohio’s oldest business and still today agriculture is Ohio’s largest industry," said Frank LaRose (R-Hudson), who co-sponored the legislation. "This commonsense reform will ensure that Ohio’s farm families can stay on their land and continue to grow their businesses while simultaneously growing the crops and livestock which feed America and the world.”


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