LIMA — Senate Bill 36, a piece of legislation proposed by Sen. Cliff Hite, could pass a portion of property tax burden from farmers to homeowners.
The bill, in the Ohio Senate Ways and Means Committee, would provide property valuation discounts to any land zoned as agricultural or woodlands.
If passed, the bill could have a negative impact on some taxpayers in one way or another. The proposal would lower valuation for farmers. While property taxes are approved by voters, technically they approve a fixed dollar amount that rolls back as property values increase. With lower valuation on farmers, homeowners would then pick up the difference to keep the levy at that fixed value amount.
If provisions are made in the bill to keep that from happening, school districts, especially rural ones, would lose funding.
“The difficult part is that agricultural valuation is the big part of funding for rural districts like ours,” said Waynesfield-Goshen Superintendent Chris Pfister. “There should be some corrections in the farmland formula, but we will definitely see the difference if this is modified and we receive less money.”
Bruce Kettelle, the chairman of Ohio Farmers For CAUV, or Current Agriculture Use Value, said dramatic tax hikes are causing for the need in the change.
“Values are calculated on a three-year basis,” Kettelle said. “We feel it should be closer to what farmers experience.
Kettelle said he realized that homeowners have seen an approximate 20 percent increase during the last six years, but farmers have seen about a 300 percent increase during that same period.
However, school officials are not convinced. The Ohio School Boards Association and other public school groups testified before the Ways and Means Committee on March 8, worried about the effect on school districts.
“While we support the concept of CAUV, which allows farmers to pay property taxes based on the value of their land for farming rather than the market value, we oppose the passage of Senate Bill 36,” said Ohio Association of School Business officials representative Barbara Shaner. “The result of the benefits to agricultural landowners will create a shift in tax burden at a time when residential taxpayers have already experienced a major shift in responsibility.”
Shaner argued that in 1990, homeowners were responsible for 44 percent of total property taxes. In 2015, that number had grown to 64 percent.
Hite, R-Findlay, said schools have legitimate concerns, but added that legislators are working with Ohio School Boards Association auditors and others to find “wiggle room” enough where they can still give farmers some relief.
“There is too much fluctuation when your taxes are based on a three-year number,” Hite said. “Nobody wants this to become a ballot issue. We are trying to work it out.”
Similar CAUV changes were on the table in the last General Assembly. The measures failed in the lame duck session late last year following opposition from school organizations.
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