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

2. 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).

3. 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

4. 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

5. Woodland Valuation Deduction for subsurface tile drainage Increase from $500 to $770 OSU Farm Custom Rates, 2014 – statewide survey 25-50 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)

6. 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

7. Basic Formula

9. Adjusted Crop Prices in the Model, 2012-2015 Variance 2012201420152012-152014-15 Corn$3.19$4.48$4.55$1.36$0.07 42.6%1.6% Beans$7.74$10.13$11.09$3.35$0.96 43.3%9.5% Wheat$3.98$5.16$5.67$1.69$0.51 42.5%9.9%

10. Non-Land Production Costs Base & Added Unit, 2012-2015 Variance 2012201420152012-152014-15 Corn$350.71$437.85$516.99$166.28$79.14 +bu$0.90$1.18$1.36$0.46$0.18 Beans$227.51$275.21$325.42$97.91$50.21 +bu$0.93$1.27$1.24$0.31($0.03) Wheat$211.52$255.48$296.98$85.46$41.50 +bu$1.41$1.80$1.77$0.36($0.03)

11. Capitalization Rate TY 2012-2015 20122015 Mortgage/Equity Ratio60/4080/20 Interest Rate, 15-Year Fixed (2012); 25-Year Fixed (2015)*6.796.15 Equity Rate**6.90 5.25 Tax Additur1.51.5 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%.

12. 2015 Sample Calculation - Miami

13. Minimum Use Value/Acre 20082009201020112012-142015 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

14. Woodland CAUV/Acre 20112012201320142015 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

15. Cropland, Simple Average CAUV/Acre by Productivity Index 2007-2015 PI200720082009201020112012201320142015 0-49$ 100 $ 176$ 200$ 300$ 350 50-59 100 200 214 328 362 516 700 518 60-69 123 188 435 436 632 610 1,218 1,778 1,371 70-79 283 431 746 845 1,126 1,147 1,958 2,728 2,347 80-89 521 708 1,059 1,278 1,641 1,717 2,743 3,718 3,354 90-99 747 973 1,368 1,601 2,017 2,128 3,310 4,428 4,104 100+ 970 1,200 1,620 1,900 2,380 2,490 3,7805,0304,770 All Soils Average $ 181$ 249$ 459$ 505$ 700$ 719$1205$1668$1388

16. Cropland, Average CAUV Dollars per Acre 2000-2015

17. Average CAUV and Ohio Cropland Value - USDA Dollars per Acre, 2000-2014

19. Contact Information www.tax.ohio.gov Government, Real Property Tax Ohio Dept. of Taxation Tax Equalization Division 614.466.5744 Gloria.Gardner@tax.state.oh.us