Agricultural Advisory Committee Current Agricultural Use Values TY 2015 Public Hearing May 28, 2015

Introduction This is a public hearing before the Ohio Department of Taxation to present data on the proposed tax year 2015 Current Agricultural Use Values (CAUV).

Agenda Formula Changes Factors used in the calculation Crop prices & non-land production costs Capitalization rate Calculation of Soil Value Sample calculations Woodland & Cropland Value Comparative Charts – USDA Cropland Value Map – 2014 data from counties

Factor Updates & Cap Rate Timeliness of data Reduce two-year lag to one-year Crop yields & Crop prices Non-land production costs Current OSU Crop Enterprise Budgets (2015) Capitalization Rate Revise debt/equity split: 80% loan/20% equity Farm Credit Services 25-year fixed multi-flex rate for loan amounts $25,000 and over

Woodland Valuation Deduction for subsurface tile drainage Increase from $500 to $770 OSU Farm Custom Rates, 2014 – statewide survey ft. spacing at $0.54/ft. to install 4” diameter plastic tile Deduction for surface drainage Increase from $250 to $380 (37 soils) Deduction for clearing Increase from $500 to $1,000 (all soils)

Revised Schedule Agricultural Advisory Committee meeting to discuss preliminary values February or March of reappraisal/update year Public Hearing to finalize values May of reappraisal/update year Tax Commissioner’s journal entry and table of values Issued to County Auditors in June CAAO surveyed members; support schedule

Basic Formula

Adjusted Crop Prices in the Model, Variance Corn$3.19$4.48$4.55$1.36$ %1.6% Beans$7.74$10.13$11.09$3.35$ %9.5% Wheat$3.98$5.16$5.67$1.69$ %9.9%

Non-Land Production Costs Base & Added Unit, Variance Corn$350.71$437.85$516.99$166.28$ bu$0.90$1.18$1.36$0.46$0.18 Beans$227.51$275.21$325.42$97.91$ bu$0.93$1.27$1.24$0.31($0.03) Wheat$211.52$255.48$296.98$85.46$ bu$1.41$1.80$1.77$0.36($0.03)

Capitalization Rate TY Mortgage/Equity Ratio60/4080/20 Interest Rate, 15-Year Fixed (2012); 25-Year Fixed (2015)* Equity Rate** Tax Additur Capitalization Rate7.5%6.6% *Farm Credit Services 25-year fixed multi-flex rate for loan amounts $25,000 and over. **Equity rate is the prime lending rate plus 2%.

2015 Sample Calculation - Miami

Minimum Use Value/Acre Slopes 25% or Less Cropland$100$170$200$300$350 Pasture$100$170$200$300$350 Woodland$100 $120$200$230 Slopes exceeding 25% Pasture$100 $200$230 Woodland$100 $200$230

Woodland CAUV/Acre Slopes 25% or Less Maximum$1,500$1,630$2,780$4,030$3,030 Median$200$230$510$1,050$230 Average$321$351$727$1,171$603 Minimum value: all slopes Woodland$200$230 Number of soils at minimum value: all slopes 2,308 2,387 1,408 1,097 1,974

Cropland, Simple Average CAUV/Acre by Productivity Index PI $ 100 $ 176$ 200$ 300$ ,218 1,778 1, ,126 1,147 1,958 2,728 2, ,059 1,278 1,641 1,717 2,743 3,718 3, ,368 1,601 2,017 2,128 3,310 4,428 4, ,200 1,620 1,900 2,380 2,490 3,7805,0304,770 All Soils Average $ 181$ 249$ 459$ 505$ 700$ 719$1205$1668$1388

Cropland, Average CAUV Dollars per Acre

Average CAUV and Ohio Cropland Value - USDA Dollars per Acre,

Contact Information Government, Real Property Tax Ohio Dept. of Taxation Tax Equalization Division