CLEVELAND (AP) – Ohio farmers are seeing big increases in their property taxes and, like the weather they curse and embrace, there’s not much they can do about it.
Recent reappraisals by county auditors have increased taxes on some farm parcels as much as 400 percent at a time when grain prices have plummeted.
Taxes on Ohio farmland are not based on market values like houses or commercial property, but instead are calculated using a complex formula that includes crop prices, to determine the land’s current agricultural use value – or CAUV.
But the CAUV formula relies on previous years’ prices and not what farmers are now getting for their grain, primarily corn and soy beans.
Ohio farmers are essentially victims of their recent success. Favorable growing conditions and technology have resulted in bumper crops the last several years. And while farmers have benefited from high grain in the last couple of years, prices have plunged in 2014.
Most states in the Midwest use similar tax formulas that consider soil types, crop yields, crop prices and interest rates. In Ohio, farm taxes are calculated by averaging five years’ worth of numbers over a seven-year period, discounting the high and low years.
Jarra Underwood, auditor for rural Wayne County south of Cleveland, said higher farm values are the result of “perfect storm.” Wayne County’s assessment on agricultural property has doubled from 2013 to this year, she said.
The CAUV has been in place since the early 1970s and has largely helped farmers. If agricultural property was taxed on market value, farmers in exurban areas where land is coveted for development would have to sell because they could not afford to keep their land, said Lowell Wolff, a dairy farmer in Medina County south of Cleveland.
Wolff said property taxes on his various parcels have risen as much as 300 percent. He would like to see small adjustments in how CAUV is calculated, but is wary of wholesale changes.”
We’re paying high taxes now,” Wolff said. “But in a few years that will turn around.”
The Ohio Farm Bureau Federation is concerned about the big jump in taxes. Officials say those who will be hardest hit are older farmers who lease their land and live on fixed incomes.
“We’re taking a hard look at the calculation and determining ways to provide relief for land owners and preserve the integrity of the program and its purpose,” said Leah Curtis, an attorney with the farm bureau.
Dean Shoup has a large pork operation in Wayne County. He and family members also farm 2,500 acres of grain they use for feed. Property taxes on some of their 100-plus parcels have jumped more than 400 percent.
“It’s a complex scenario,” Shoup said. “We’ll take our lumps this year and hopefully everyone else can handle them as well.”
Shoup said CAUV, like grain prices, are cyclical. Commodity markets typically swing one direction for three or four years. He called Ohio’s CAUV “a good program.”
“In five years, that will probably turn around and the benefits will be even greater,” Shoup said. “We just have to weather the storm.”
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