Bobby A Reed Harold L Barger Ralph M Gaither Stranded students rescued by Brown County cooperation 4-H Teen Ambassador Dunning attends SHOT Show Veterans Service Commission invites veterans to seek help with benefits Unemployment rate rises in Brown County Pick a Lollipop, help a dog A season to remember G-Men hit the field for first baseball scrimmage Eastern’s Rigdon, Purdy earn AP SE District Div. III honors New blocking, kicking rules address risk minimization in high school football Judy A Schneider James M Darnell Lawanda R Truesdell Paul E Grisham Arrelous R Rowland Dennis E Stivers David M Daniels Fayetteville man is charged with child porn April 1st Grand Opening for Jacob’s Ladder Resale Boutique in Georgetown Talent Show auditions at Gaslight Theatre Nine indicted by county grand jury Vietnam Veteran’s Memorial Wall visit coming next May to BC Fairgrounds In it to win it! Bronco wrestlers end season on successful note Eastern’s Hopkins finishes 5th in long jump at OATCCC State Indoor Track and Field Meet SBAAC awards academic all-stars, winning teams Marvin D Atkin Beverly S Flatt Jessie M Sanders Leroy Deck Sr Jody A Towler Sherman E Young Kenneth C Burton Varnau’s face second defamation suit Attorney General to visit Georgetown schools Clermont County GOP hosts Wenstrup, DeWine at dinner Fatal car crash in Adams County BC Chamber welcomes new Cricket Wireless store to Mt. Orab Aberdeen Council approves 2017 budget Royce K Zimmerman Lady Warriors advance to Elite 8 SBAAC awards boys basketball all-stars SBAAC girls basketball all-stars take home awards SHAC Winter Sports Awards Banquet set for March 12 Altman claims 170-pound district title Sirkka L Buller Arthur C Schneider Lowell G Neal Virginia M Schirmer Connie S Darling Harold L Purdin Terry E Frye Lucille Schumacher Lady Warriors roll to district finals Broncos take care of business to claim sectional crown G-Men upset MVCA to earn berth sectional finals WBHS JROTC Rifle Team competes at Camp Perry Lady Rockets finish 12-12 Season reaches end for Rockets Eugene D Ring Two indicted on major drug charges Two charged with home invasion Cincinnati airport expanding services, lowering prices in effort to compete Two sentenced in common pleas court Georgetown man hurt in car crash Robert G Miller Linda M Howland Robert E McKinney Mildred J Hodges Farrel L Amiott Patricia Brown Rick L Dye Mary E Nagel Betty Ratliff Broncos claim SBAAC wrestling title Broncos pull ahead for win over G-Men in SBAAC Tourney Ripley boys wrap up regular season with win at Lynchburg Eastern girls are sectional champs Anderson pleads not guilty to battery charge Some county offices to change locations Fayetteville prepares for Traveling Vietnam Memorial Wall HealthSource hosts Chamber of Commerce meeting Five sentenced in Brown County Common Pleas Court June Howser Marguerite A Fender Timothy D Harris Jay R Purdy Robin S Godwin Marc A Wachter Chester W Eyre Warriors blast past the G-Men, 61-40 Rockets performing well heading into post-season tournament play Lady Warriors bring home the Gold with perfect 13-0 finish in SHAC Western Brown Junior High wrestling team wraps up successful season Rockets fall victim to ‘Pack’ attack Broncos suffer heartbreaking loss to Mentor Lake Catholic in state quarterfinals Adult Education Center coming to county ‘Senior Playground’ moving forward at Georgetown park

Ohio Farm Bureau looks for alternatives to enact CAUV changes

After months of administrative stalemate, the Ohio Farm Bureau Federation is taking their campaign to fix Current Agricultural Use Value to the Ohio General Assembly.

Both the Ohio House of Representatives and Ohio Senate introduced identical bills backed by the OFBF into their respective chambers on November 17 and November 18, respectively, looking to make adjustments to the complex CAUV formula. The OFBF believes that these adjustments will help lower taxes on Ohio farmers, allowing them to continue their business even in a tough economic market.

“Farm bureau’s goal is to improve the accuracy of the formula,” Amy Milam, Director of Legal Education at OFBF said. “I think these are going to be good steps towards that.”

CAUV is a real estate tax reduction program in Ohio that provides farmers who meet certain agricultural qualifications the ability to pay less than market value for their land, making it easier for them to keep their farms in business. To qualify for CAUV, a farmer must have “ten or more acres must be devoted exclusively to commercial agricultural use,” or if they have less than ten acres “devoted exclusively to commercial agricultural use, the farm must produce an average yearly gross income of at least $2,500,” according to the Ohio Department of Taxation.

CAUV uses a formula that takes into account five factors that impacts the income producing potential of farmland, according to the Department of Taxation’s CAUV fact sheet. The five factors are producing potential of farmland: crop prices, crop yields, interest (capitalization) rates, cropping patterns and non-land production costs. The formula takes these factors into account and looks at the last seven year’s of a farmer’s production, cuts off the best year and the worst year, and then averages out the five middle years to determine each farmer’s agriculture real estate taxes.

As of 2014, the market value of an acre of land in Brown County was $2,436, but with CAUV reductions, a farmer with an acre of land would only have to pay an average of $888. That’s a 63.5 percent reduction of market value.

Every three years, CAUV valuations are recalculated across the state. The recalculations are staggered across the three years so that not everyone is feeling the affects of tax reduction changes, whether positively or negatively, at the same time. Brown County’s recalculating year is in 2015, with new tax numbers beginning on Jan. 1, 2016. According to Brown County Auditor Jill Hall, the Department of Taxation’s recalculations will see most farmers in Brown County who qualify for CAUV pay around twice as much in taxes next year as they did in the previous three years.

In November 2014, the OFBF made a series of recommendations to the Department of Taxation to adjust the formula. According to the Department of Taxation, two recommendations from the OFBF were adopted last March; using more current data for crop yields, crop prices, and production costs, and making adjustments to the capitalization rate.

But the OFBF felt there were other adjustments to make, and in May requested more changes from the Department of Taxation. After months of gridlock in Columbus, the OFBF decided it was time to go through legislative means to pass their agenda.

According to Milam, the bills would further adjust the capitalization calculations as well as set land set aside as conservation land at the lowest taxable rate.

“Both of these bills look at two specific recommendations we made in May,” Milam said. “One is to use a more accurate method of capitalization rate in the formula by removing some non-farm factors that are being used, such as appreciation and equity build up. The second item in the bills is for conservation land is to be valued at the lowest soil value.

“It’s looking at land that’s being used for conservation practices for at least three years. Additionally, this is going to the valuation of these conservation practices. Land enrolled in the federal conservation retirement program has no acreage limit on that. With respect to land not in a federal conservation program, currently the statute states up to 25 percent of the CAUV acreage can be used for these practices.”

The bill in the Ohio Senate is sponsored by State Senator Cliff Hite (R-Senate District 1) and the bill in the Ohio House of Representatives is sponsored by State Representative Brian Hill (R-Representative District 97). Brown County’s State Representative Doug Green (R-Representative District 66) is a co-sponsor of the bill.

According to an OFBF press release, the OFBF wants to change some assumptions in the formula that they feel inaccurately values farmland.

“The organization is challenging two inaccurate assumptions in the CAUV formula’s capitalization rate: that land is a short-term investment and that it becomes more valuable as its mortgage is paid down,” the press release states. “The two bills would prohibit certain non-agricultural factors from being used in the CAUV formula and remove disincentives for farmers to engage in certain conservation practices.

“The current CAUV formula assumes land is held for only five years when in reality farmland is typically held for decades and across multiple generations. Currently, there are non-use factors in the formula that inflate farmland value by assuming land appreciates and landowners achieve equity buildup at predetermined rates. But these have nothing to do with the agricultural use of the land. In both bills, the use of equity buildup and appreciation factors would be prohibited.

“Also in the bills are stipulations that CAUV land used for a conservation practice or enrolled in a federal land retirement or conservation program for at least three years be valued at the lowest of the values assigned on the basis of soil type. This requirement would encourage practices that protect the environment and water quality. Currently, farmers are discouraged from idling land because it is taxed as though it is producing crops. Farm Bureau believes taxing conservation lands at the CAUV minimum value is appropriate because conservation lands are non-producing.”

It remains unclear whether or not these bills will make the House and Senate floors, or even if they will pass. There’s no timeline yet on when the bills will be recommended for a committee.

Brown County Auditor Jill Hall is hosting a forum on Thursday, December 10 at 7:00 p.m. at Southern State Community College’s Mt. Orab campus for farmers who qualify for CAUV to ask questions about their tax changes and the reasons behind it. It’s important to note that Hall does not make the changes to CAUV values, but the Department of Taxation does.

Milam will also be at the event representing the OFBF.

Two bills were introduced last week in the Ohio House and Ohio Senate, seeking to improve the accuracy of the CAUV formula.
http://newsdemocrat.com/wp-content/uploads/2015/11/web1_GeorgetownFarm1-DanielKarell-1.jpgTwo bills were introduced last week in the Ohio House and Ohio Senate, seeking to improve the accuracy of the CAUV formula.
Dual bills in Ohio House and Senate seek CAUV changes

By Daniel Karell

dkarell@civitasmedia.com

Reach Daniel Karell at 937-378-6161. Follow him on Twitter @GNDKarell

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