Farms & taxes

A significant increase in the taxable value of farm land could leave some area farmers paying nearly double in taxes this year compared to last year.

More than 181,000 acres of land in Washington County are taxed based on their Current Agricultural Use Valuation (CAUV), a valuation measurement which is almost always significantly lower than the market valuation would otherwise be for the land. The CAUV program was introduced into law 40 years ago and creates a different valuation for 3,500 soil types found on farms throughout the state.

Each county readjusts CAUV values triennially based on a five-factor formula developed by the state, said Washington County Auditor Bill McFarland.

This year two factors-higher prices for crops and historically low interest rates-have caused CAUV rates for the 2013 tax year to double, triple or even quadruple in some rare instances.

Coupled with other ever-increasing costs, the change will be a tough pill to swallow as tax bills are mailed out this week, said Ralph Coffman, president of the Washington County Farm Bureau.

“Farmers are definitely getting hit hard for the fuel costs and the feed costs. All of those things have gone up significantly in recent years. You hate to see those land valuation and taxes going up as well,” he said.

However, informational sessions by the Ohio Farm Bureau and outreach by the Washington County Auditor’s Office have been readily available, and many farmers are-if not happy with- at least accepting of the changes, said Bill Stacy, who along with his family owns and operates Stacy Family Farm.

“We knew it was coming. I’m sure we’re all budgeting for it to a certain extent,” he said.

While understanding of the changes, Stacy said he wishes the increased taxes paid toward the county would translate into increased funding for agriculture. Agriculture was one of the departments that did not see an increase in funding for the Washington County 2014 budget, he noted.

Most farmers received notice of their valuation increase in the fall, but their actual tax increase will not be certain until the tax bills are in hand, said Marty Clark, who owns 250 acres of farmland in Fairfield Township and teaches AgriBusiness Planning and Analysis at the Washington County Career Center.

“We don’t know how much it will go up in dollars for the actual tax bills yet,” said Clark, who does consulting for around 30 local farmers enrolled in the class.

However, one fear that farmers can set aside is that a doubled valuation will result in a doubled tax bill, said McFarland.

“They aren’t parallel,” he said.

The valuation increases will affect each individual property owner differently, said McFarland. Among other things, the individual’s district of taxation impacts the actual increase in taxes, he said.

To use some actual examples, one 78-acre farm in Ludlow Township saw its CAUV increase 66 percent from 2012 to 2013-from $35,400 to $58,830. The actual taxes on that property will only increase 30 percent-from $971 to $1,264.

The net tax change for a 30-acre farm in Warren Township comes closer, but still falls slightly short of mirroring its valuation increase.

The farm’s valuation increased 88 percent-from $4,890 to $9200. Its taxes jumped 82 percent for 2013-from $65 to $119.

Furthermore, more than half of the land enrolled in CAUV in Washington County is at the minimum valuation-now $350 per acre.

Even with the valuation increases, farmers enrolled in CAUV are still saving money, said Betsy Anderson, organization director for the Ohio Farm Bureau office that oversees Washington, Noble, Belmont, Guernsey and Monroe counties.

“Even though CAUV values are increasing, they are still a good value for farmers,” she said.

For example, the same farm that is now paying $1,264 in taxes is still saving $393 with the CAUV program. The farm paying $119 is saving $364 with the program.

No one likes higher taxes, but Christy Haines, owner of Knoch Farm in Lowell, understands the reasoning behind the increase, she said.

“Our yields have gone up. The prices we’ve received for products has gone up. I understand,” she said.

Haines anticipates the increase and budgets, she said.

“We have always held money back knowing that it is an expense that is coming. I don’t get rid of all the eggs in the basket,” she explained.