Ohio Farmers’ Plea for Lower Property Tax Could Adversely Affect Schools

By Sam Milton — June 06, 2016 1 min read
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With Ohio’s budget deadline looming at the end of June, tensions remain high over House and Senate bills seeking to reduce property taxes for farmers, which could potentially take millions away from both residential homeowners and schools.

The controversy stems from how to adjust the Current Agricultural Use Value (CAUV), a formula used by the state to monitor agricultural property value. The value has already been adjusted in recent years to ease tax burdens on farmers battling tough conditions with high crop prices and low interest rates. According to the Columbus Dispatch, the average property value per acre of farmland dropped from $1,688 in 2014 to $1,279 in 2015, and some estimates claim the new bills would reduce the value by an additional 25 percent.

However, as is the case with any complex budgetary operation, an action elicits a reaction, meaning that lowering farm property values would increase the tax rates of residential homeowners to cover the difference.

In addition, Ohio’s Legislative Services Commission estimates that the dip in farmland value would result in annual tax losses of nearly $15 million for schools and $17 million for local governments.

Howard Fleeter, an analyst for Ohio’s public education advocacy groups, also pointed out that diminishing farmland values would designate urban and suburban communities as comparatively wealthy in the state’s school funding formula, making it more difficult for them to receive money.

“Other than screwing up the State Share Index [school funding formula], a loss in revenue for local governments, and a tax shift to residential property taxpayers, what’s not to like?” joked Fleeter.

As recently as 2013, Ohio Gov. John Kasich was on the opposite side of the property tax issue, arguing then that lower property values in urban and suburban districts meant they had a more glaring need and therefore deserved additional funding.

Whether Kasich still abides by those convictions with regards to these bills remains to be seen.

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A version of this news article first appeared in the Rural Education blog.