CAUV

Ohio Farmers Union Outlines Policy Priorities for 2016

February 11, 2016 By Ron Sylvester Leave a Comment

Ohio’s Farmland Property Tax Problem, Frack Waste Key Issues

COLUMBUS – From opposition to the Obama Administration’s proposed Trans-Pacific Partnership to advocacy for further reform in the way farmland is taxed in Ohio, the Ohio Farmers Union announced 2016 policy priorities today that touch both state and federal government.

OFU President Joe Logan said that the Farmers Union is one of the few remaining farm organizations that looks out exclusively for the independent, family farmer.

He said that on issues like international trade, government-sponsored commodity checkoffs and many issues in rural Ohio arising because of fracking, OFU’s stance is rooted in “looking out for the little guy.”

“Neither the National Farmers Union, nor the Ohio Farmers Union, have been captured by huge multi-national corporate interests or the ongoing trend for big business consolidation in agriculture,” Logan said.

“Our policy priorities are different. If you’re running a family-sized farm or working to build a local or regional food and fiber network, OFU puts your interests first.”

Two highlights from this year’s priorities are proposed reforms to Current Agricultural Use Valuation and the standards for fracking waste disposal wells.

CAUV is the system for taxing farmland that is currently in production. It was enacted in the 1970s and values farmland across Ohio according to its agricultural value rather than a general market value. CAUV has kept much of Ohio’s farmland from disappearing into urban and suburban sprawl and has helped farm families across the state continue to work their farms. Since the end of the Great Recession, farm families in Ohio have seen their CAUV assessments increase 50-300 percent.

OFU is backing S.B. 246 and H.B. 398, both pending in their respective houses of the Ohio General Assembly. Logan said both bills would update the complex formula used to determine CAUV land value to better reflect changes to the economy since the Great Recession. The wild fluctuations experienced over the past several years would be taken out of the system, legislators hope.

OFU is also calling on the Kasich Administration to change Ohio’s regulations concerning the deep wells used around the state to dispose of waste from fracking. This waste comes from Ohio’s gas and oil production as well as that of neighboring states.

Specifically, the 4,000-member family farmer group wants a moratorium on so-called Class II injection wells used for frack waste. OFU wants any new frack waste disposal wells to be built and regulated under Class I standards. Along with ensuring the wells would be built more robustly, Class I wells are regulated by the Ohio Environmental Protection Agency rather than the Dept. of Natural Resources.

In all, OFU is unveiling nine 2016 policy priorities. Please follow this link for a document outlining them in their entirety.

Ohio Current Agricultural Use Value Docs

June 3, 2015 By Ron Sylvester 1 Comment

There has been a lot of deserved attention to CAUV (Current Agricultural Use Value) valuations by our membership over the past two to three years. While we have worked especially hard to represent you in Columbus, I think we should also provide the actual documents being distributed by the state of Ohio regarding CAUV.

For those who are not farmers in Ohio, CAUV is a system for taxing farm land in Ohio that grants a property tax break to active farmers. To be eligible for CAUV:

To qualify for the CAUV, land must meet one of the following requirements during the three years preceding an application for the CAUV:

Ten or more acres must be devoted exclusively to commercial agricultural use; or
If under ten acres are devoted exclusively to commercial agricultural use, the farm must produce an average yearly gross income of at least $2,500

Why CAUV? States grant a special status to farm land to:

keep the land in agricultural use (farmland preservation)
help farmers account for the sometimes wild fluctuations in the markets they produce in – land is a cost of production

Here are the documents recently released by the Ohio Dept. of Taxation regarding CAUV:

Ohio Dept. of Taxation Documents Regarding CAUV

June 1, 2015 By Ron Sylvester Leave a Comment

We know that CAUV valuations have been a hot-button issue for many family farmers in Ohio over the past few years. The latest information is here. In addition to that, here are three documents released by the Ohio Dept. of Taxation in May 2015:

OFU lauds initial tweaks to CAUV, but more is needed

June 1, 2015 By Ron Sylvester 1 Comment

Woodlands need more attention from state officials

Mel Borton, Ohio Farmers Union.

In more than 80 years of life spent on and around Ohio’s farms, Mel Borton has seen cycles of woodlands preservation and cutting the woods on farmland.

“One sure way to remove woodlands across the state is for the real estate tax code to essentially promote chopping down trees,” said Borton.

“In my first 40 years, farmers cleared their woods as fast as they could. In my last 40 years farmers were conserving woodlands. It seems like the pendulum is swinging away from conservation and that’s a shame,” Borton added.

Mel Borton, left, talks to fellow OFU member Karen Wood at OFU’s summer picnic in 2014. The Ohio Farmers Union is the second-largest general farm organization in Ohio.

He fears that’s exactly what Ohio’s Current Agricultural Use Valuation system for taxing farmland is doing. He and other members of the Ohio Farmers Union are pleased that the Kasich Administration began fixing CAUV this year, but many, like Borton, worry that woodland valuations are still not functioning in the way that CAUV framers intended.

Borton, a retired farmer and former lobbyist for OFU, spoke out at last Thursday’s Ohio Dept. of Taxation CAUV Advisory Committee hearing.

“I told the committee that I volunteer answering phones at our (OFU’s) state office and farmers are telling me that they are clearing their woods because of CAUV,” Borton said.

“The folks in Columbus have done some good things this year to get the wild swings in CAUV under control, but they haven’t done enough on woodlands,” Borton added.

Ted Finnarn, OFU’s resident CAUV legal expert and a member of the state’s CAUV advisory committee said that woodland values will be lower in the 2015 tax year as compared to 2014, but OFU and other ag groups need to keep the pressure on the tax department to continue reviewing woodland valuations and the capitalization-interest rate.

“I think the Tax Department is moving in the right direction, but much more needs to be done to come up with CAUV values that are more reasonable,” Finnarn said.

Finnarn, a Greenville attorney, has been on the advisory committee since its inception in the 1970s. The committee met last week to hear public comment and to release the 2015 valuations for CAUV.

Ohio Tax Commissioner Joe Testa said his department has heard and responded to concerns about CAUV.

“I am certainly aware that there are some farmers and farm land owners facing tax increases but believe the factors impacting land values are moving in a favorable direction for the agriculture industry in Ohio,” Testa said.

“The CAUV remains a very valuable program for Ohio’s farmers which results in
significant property tax reductions when compared to land not being used in agriculture,” he added.

Testa said the values released last week affect the 24 counties in this year’s triennial CAUV re-valuation rotation. According to the department, the average CAUV per acre in 2015 in Ohio is $1,388, which is 17 percent less than the 2014 valuation of $1,668.

The department made changes, as suggested by the Ohio Farmers Union and Ohio Farm Bureau earlier this year.

On behalf of OFU, Finnarn worked closely with the Farm Bureau and others across the state for more than two years as CAUV values began to wildly fluctuate. Among the recent changes, Finnarn points out the following differences between the 2015 tax year and previous years:

Modifications to the Capitalization-Interest Rate by going to a longer term fixed rate with an 80% loan-20% equity split versus the previous more restrictive 60% loan-40% equity calculation. This will have the effect of lowering CAUV values from the originally proposed values.

Correction to woodland values by updating and increasing the costs of clearing from $500 to $1,000 and increasing sub-surface drainage to $770 and surface drainage to $380. Woodland values will be lower for 2015 as compared to 2014.

Improving the accuracy of input data in regards to crop prices and cost data by bringing it more current in regards to crop production yields, crop price values and costs. Inputs from the Ohio State University crop enterprise budget for 2015 were put into the formula so that this represents no lag time. These costs have increased – lowering the CAUV values from the original proposal.

Finnarn said some values are still increasing from the 2012 values, but not as much as they would have without the changes. Values will not change for the 41 counties that underwent their reappraisals and reevaluations for tax year 2014 (increased taxes paid in 2015). However, these counties will benefit from the changes in the future when they recycle for reevaluations in three years in tax year 2017.

OFU 2015 Special Orders of Business

February 3, 2015 By Ron Sylvester Leave a Comment

Adopted by delegates to the 81st Annual Ohio Farmers Union Convention

You’ll find below a link to our 2015 Special Orders of Business. Each year at the OFU Annual Convention, delegates debate a range of public policy topics they believe need attention from state or federal officials. Many of these are officially adopted as ‘special orders of business’ for OFU to pursue as an organization throughout the rest of the year. This year’s slate of special orders covers topics from taxes to money in politics to the water quality issue in the western basin of Lake Erie.

Click Here for 2015 OFU Special Orders of Business

Click Here for advisory white paper accepted by convention delegates regarding Current Agricultural Use Valuation in Ohio

Read the news release:

Ohio Farmers Union Outlines State, Federal Policy Priorities for 2015

Lake Erie, Pipelines, Taxes and Trade Among Concerns

COLUMBUS – Meeting in Columbus over the past weekend, Ohio’s second-largest general farm organization adopted twelve state and federal agricultural policy priorities for 2015.

Joe Logan, president of the Ohio Farmers Union, said delegates to OFU’s 81^st Annual Convention focused primarily on two issues – water quality in the western basin of Lake Erie and farm real estate (CAUV) taxes.

“Most Ohioans don’t realize that many farmers’ real estate taxes on their farmland have spiked 100, 200 – even up to 300 percent in the past few years,” Logan said.

“Ohio’s program for establishing the tax value of farmland was a major issue for delegates and we approved a policy proposal that we believe would alleviate the shocking increases in tax rates farmers have experienced,” Logan said. “Farmers are being asked to shoulder an unfairly large portion of the total tax burden,” Logan added.

“This is an alarming trend that has been picking up steam in recent years.”

On Lake Erie, Logan said that the “overwhelming majority” of farmers are good stewards of the land and water. Many have adopted conservation, technological and nutrient management best practices to alleviate agricultural run-off into Lake Erie.

“The science tells us that agriculture remains a significant source of the phosphorous feeding harmful algal blooms in the lake. It appears that the legislature is choosing a more regulatory approach to nutrient management. We believe any regulations should be targeted toward those watersheds where problems are known to exist and should deal with all sources of nutrient overloads,” Logan said.

The twelve policy statements, or “special orders of business” for OFU may be found online.

They include statements on:

Water Quality in Ohio
Syngenta GMO Corn Litigation
Current U.S. Trade Policy Concerns
Private Property Rights and Private Sector-Owned Pipelines
Farm Real Estate Taxes – CAUV
Maintaining Guaranteed Landline Telephone Service
Community Right to Know
Seed Saving and Genetic Diversity
A Move to Amend the U.S. Constitution
Severance Taxes on Oil and Gas in Ohio
Change Laws Regarding the Commodity Checkoffs
Funding Claims Under the “Predator Law” in Ohio

81st OFU Convention Preview

January 26, 2015 By Ron Sylvester Leave a Comment

Here’s the press release sent statewide by the Ohio Farmers earlier today:

Water Quality, Farmland Tax on Deck for Ohio Farmers Union 81st Convention

State Representatives Sheehy, Patterson will be honored on final day of meeting

COLUMBUS – Ohio’s educational and advocacy organization dedicated to family farming will tackle several hot button issues in Ohio during its 81st annual convention in Columbus this Friday.

“We expect 2015 to be an exceptionally important year for Ohio’s farmers in terms of state legislation and Kasich administration tax policies,” said Linda Borton, executive director of the Ohio Farmers Union.

“Farmers in Ohio are facing additional regulation with manure application and they are already feeling the effects of agricultural property taxes increasing by 50 to 300 percent in the past couple of years,” Borton said.

“Those two items – water quality and the broken CAUV formula – will be major points of emphasis for our policy committee,” Borton said.

CAUV, or Current Agricultural Use Valuation, is a state tax formula instituted in the 1970s to help protect Ohio farmland by lowering the property tax bills for farmland. The program is responsible for keeping much of Ohio’s agricultural lands in production as the lower property tax rates do not skew the farmers’ cost of production, especially in areas where rural land is threatened by urban sprawl and suburban development.

Due to changes in commodity markets and the effects of a changing larger economy, over the past two to three years, the formula used by the Ohio Dept. of Taxation for determining a farmer’s CAUV tax value has begun to wildly fluctuate. In many cases across the state, family farmers have seen their farmland property taxes rise by 300 percent or more in a single year.

Borton said that on the water quality front, OFU is expected to adopt policy for 2015 urging the Ohio General Assembly to take a “science-based and targeted” approach to new regulation. During the debate over H.B. 490 in 2014, OFU President Joe Logan and other members asked the Ohio House to limit tighter regulatory schemes to distressed watershed areas such as the Maumee River Basin in northwest Ohio.

“No one wants to see the algae problems we’ve had in Lake Erie and in other waterways,” Borton said.

“The key is for regulation to be fair, fact-based and targeted,” Borton added.

[Read more…]

Ohio Farmers Union Proposes Substantial Improvements to CAUV

November 21, 2014 By Ron Sylvester 2 Comments

COLUMBUS – Ohio Farmers Union (OFU) has proposed substantial recommendations to the governor, the Ohio Department of Taxation and the General Assembly concerning corrections and improvements to the Current Agricultural Use Value (CAUV) program.

Under CAUV, farmland is taxed on its agricultural use rather than its Fair Market-Recent Sales Value (FMV).

According to Ted Finnarn, attorney and long-time member of, “The CAUV formula has worked well in the past, but during the recent three years, it has gone out of whack,” said Ted Finnarn.

Finnarn is a long-time leader in OFU, a Darke County attorney and member of the Ag Advisory Committee to the Ohio Department of Taxation.

“The problem was mainly due to the extremely low interest–capitalization rate in the formula, as a result of the Federal Reserve’s unprecedented monetary intervention policy known as ‘quantitative easing’ and the lack of a three-year averaging factor in the computations. “

Farmers around the state have been slammed with rising property tax values as a result over the past three years. In tax year 2014, those farmers whose land is up for revaluation are seeing tax increases from 100 to 200 percent. Another factor affecting rising values is lower grain prices versus a farmer’s expenses.

After a careful review of the CAUV history over the past almost forty years, consultation with farmers, appraisers, attorneys, economists and other parties, OFU has recommended the following corrections and changes in the formula:

Establish a Stabilization Equalization Factor (SEF) with three-year averaging within the formula that would even out the “roller coaster” gyrations in the CAUV as it is applied to the applicable counties during their year of valuation change.
In regards to the capitalization-interest rate, go back to a longer term fixed rate, that was originally used in the formula (30 years) and take out any influence from the QE program.
Return to a more traditional loan-equity percentage split of say 80% loan vs. 20% equity rather than the recent “too restrictive” breakdown of 60%/40%. (The program originally used a 90%/10% mix).
Eliminate and take out the two (2) sinking fund adjustments of “less equity build up” and less “5% appreciation” which were mistakenly put in a few years ago, since they are somewhat related to commercial building appraisal methods, and not farm income valuations.

[Read more…]

Finnarn Continues to Collect Signatures on Out of Whack CAUV

October 9, 2014 By Ron Sylvester 1 Comment

Ted Finnarn, Darke County Farmers Union Secretary-Treasurer, who is also a Greenville attorney, has been working for the past several months to educate farmers and rural landowners about skyrocketing Current Agricultural Use Value assessments for farm land property tax purposes. He’s even enlisted the help of editorial cartoonist Paul Ackley in his endeavor, as seen from the cartoon above.

Check out this link for more background on the CAUV valuations issue.

Finnarn and others, working as Ohio Farmers United Against Unfair Taxation, have been circulating petitions at farmer gatherings for the past several months. The petitions have been spotted at meetings of the Ohio Farmers Union, Ohio Farm Bureau and at the recent Farm Progress Show in London, Ohio.

The petition lays out the case for what Finnarn and others believe is a broken promise made to farmers in the 1970s by current state legislators. It asks the governor and Ohio General Assembly to do three things to get CAUV valuations back in line with an agricultural landscape that is showing lower prices for commodities and increasing costs of production:

We call on the Governor to immediately take administrative action on the CAUV to modify the formula by adopting a “Rule of Three,” 3-year averaging on any increases (or decreases) in the CAUV values, as they are implemented in the respective counties and that any increase (or decrease) to be capped at no more than 50%.
We call on the Ohio General Assembly to reverse the action taken in the recent state budget and to restore the 10% rollback, the 2.5% residential reduction and the homestead exemption as it was before.
As the least measure, we call for enactment of legislation that would allow real estate taxpayers that have at least a 50% increase in the real estate taxes to have a delayed payment plan option with no interest or penalty, to pay said taxes on a monthly basis to the time the next installment is due (6 months).

Please review the entire petition linked here. You may also download the petition and collect signatures in your own community. Completed petitions may be mailed to Ted Finnarn, 421 Public Square, Greenville, Ohio 45331.

CAUV Values to Skyrocket for 2014 Tax Year

August 7, 2014 By Ron Sylvester 5 Comments

Farmers across Ohio have benefited in the past in regards to CAUV values that have been kept extremely low and now these values are scheduled to increase quite a bit in the next few years.

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.

[Read more…]

Ohio’s Farmland Property Tax Problem, Frack Waste Key Issues

Woodlands need more attention from state officials

Adopted by delegates to the 81st Annual Ohio Farmers Union Convention

Water Quality, Farmland Tax on Deck for Ohio Farmers Union 81st Convention

NATIONAL FARMERS UNION

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