Ted Finnarn, Darke County attorney, is the Ohio Farmers Union representative to the Agricultural Advisory Committee of the Division of Tax Equalization and this CAUV Advisory Committee functions to advise the Ohio Department of Taxation on the operation of the Current Agricultural Use Valuation (CAUV) law and the consequent valuations used under the law.
Finnarn has served on this State Committee for over 38 years originally being appointed by the Ohio Farmers Union in 1976. Scott Zumbrink, Darke County Treasurer, has also served on the committee, representing the State Treasurers’ Association since 2007.
According to Finnarn and Zumbrink, the CAUV table valuations (which vary according to soil type, slope, drainage and soil management groups, using inputs of a 5-year “olympic” average of crop prices and costs of production) will increase substantially for tax year 2014 effective for taxes to be paid in 2015. When the more important comparison is made between the 2011 table valuations to the 2014 valuations (the 2011 table being the last one used by counties, which will now use the 2014 values, due to the 3 year rotation), farmers may see increases of approximately 110-185% or more in CAUV values.
Finnarn and Zumbrink said that CAUV values had been kept artificially low in the past since they were mainly dependent on crop prices – which were low – versus expenses. Federal government farm payments have never been taken into consideration. CAUV values got so low in some counties (circa tax year 2005) that farmers were only paying $3 – $4 per acre per year on some of their farm real estate.
“We had a real problem of almost losing the CAUV entirely during the summer of 2006 since the values were so much lower than the fair market value of farm real estate,” Finarn said.
Recently, the formula had to be adjusted and updated. With the 2008-2012 increase in crop prices coupled with lower interest rates, it was inevitable that the CAUV values would go up. Even though farmers may be paying more on their tax bill, they should realize that the highest CAUV values in the state will still be only around $5,030 per acre.