Current Agricultural Use Values (CAUV) TY 2019 Agricultural … · 2019-07-08 · Introduction....

Current Agricultural Use Values (CAUV) TY 2019

Agricultural Advisory Committee Meeting

DIVISION OF TAX EQUALIZATION

JUNE 27, 2019

of Taxation

Introduction

This is a public hearing before the Ohio Department of Taxation to present data on the proposed tax year 2019 CurrentAgricultural Use Values (CAUV).

Outline

Factors used in the Calculation ◦Crop yields & cropping pattern ◦Crop prices & non‐land production costs ◦Capitalization Rate

2019 Soil Values ◦Two‐Cycle Phase‐In ◦Average Cropland Values ◦Comparative Charts – USDA Cropland Value ◦Woodland & Conservation ◦Map – County reported data for 2018

..

Basic Formula

GOI = Crop Yield x Average Crop Price

NOI = GOI – Non‐land Production Costs Value = NOI/Capitalization Rate

Crop Yields/Cropping Pattern

• Soil yields from 1984: – adjusted by 10‐year average ofactual yields per acre for 2009‐18.

• Single crop pattern for most soils based on five‐year average of acres harvested, 2014‐2018: – Corn 38% – Soybeans 56% – Wheat 6%

• Maintain 50% corn & 50% soybeans for organic and frequently flooded soils.

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CROP PRICES USED IN FIVE YR. AVERAGE USDA National Agricultural Statistics Service Crop Year CORN SOYBEANS WHEAT

2018 2017 2016 2015 2014 2013 2012

$3.65 $3.61 $3.61 $3.89 $3.78 $4.41 $7.09

$8.75 $9.62 $9.66 $9.16

$10.30 $13.00 $14.60

$5.05 $4.90 $4.25 $4.57 $5.60 $6.54 $7.94

2011 $6.44 $13.00 $6.73 2010 $5.45 $11.50 $5.21

Adjusted Crop Prices in the Formula, 2016‐2019

2016 2018 2019

Variance

2016‐19 2018‐19

Corn $4.49 $4.18 $3.68 ($0.81) ‐18.0%

($0.50) ‐12.0%

Beans $10.91 $10.43 $9.78 ($1.13) ‐10.4%

($0.65) ‐6.2%

Wheat $5.53 $5.52 $5.15 ($0.38) ‐6.9%

($0.37) ‐6.7%

Non‐Land Production Costs Base & Added Unit, 2016‐2019

2016 2018 2019

Variance

2016‐19 2018‐19

Corn +bu

$524.47

$1.38

$529.28 $1.44

$519.04 $1.43

($5.43) ($10.24) $0.05 ($0.01)

Beans +bu

$336.33 $1.07

$346.26

$0.94

$338.54

$0.90

$2.21

($0.17) ($7.72) ($0.04)

Wheat +bu

$323.52 $1.64

$330.53 $1.49

$319.08 $1.41

($4.44) ($11.45) ($0.23) ($0.08)

Capitalization Rate TY 2016 & 2019

2016 2019

Mortgage/Equity Ratio 80/20 80/20

Interest Rate, 25‐Year Fixed

Multi‐flex Loan* 5.76 5.69

Equity Rate** 5.25 7.55

Tax Additur 1.6 1.6

Capitalization Rate 6.3% 8.0%

*Farm Credit Services 25‐year fixed multi‐flex rate for loan amounts $75,000 and over.

**Equity Rate 2016: prime lending rate plus 2%. 2019: 25‐year avg. rate of return on farm equity/USDA.

Two‐Cycle Phase‐In

Phased in over next two revaluations, beginning with counties undergoing reappraisal or update in 2017: ◦ Values are sum of the new “formula values” for 2017 and half the decrease between the “formula values” and the values for 2016. ◦ Values established for 2017, 2018, and 2019. R.C.5715.01(A)(3)(a)

Counties scheduled in 2019 will have calculation based on “formula values” for 2019 and adjusted values for 2018. R.C. 5715.01(A)(3)(b)

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2019 Sample Calculation ‐ Millgrove Slope, Erosion: 0-2, Slight Drainage: Very Poorly Prod. Index: 100

CORN BEANS WHEAT Adjusted Yield (bu/A) 200 72 102 X Crop Price/unit $3.68 $9.78 $5.15 = GROSS INCOME / ACRE $736.00 $704.16 $525.30

Adjusted Yield (bu/A) 200 72 102 Base Yield 131 39 58 = YIELD ABOVE BASE 69 33 44 X Added Unit Cost $1.43 $0.90 $1.41 = ADDED UNIT COST/ACRE $98.67 $29.70 $62.04 + Base Yield Cost/Acre $519.04 $338.54 $319.08 = TOTAL NON-LAND PROD. COST $617.71 $368.24 $381.12

NET RETURN / ACRE $118.29 $335.92 $144.18 X Cropping Pattern 0.38 0.56 0.06 = ROTATIONAL NET RETURN/Acre $44.95 $188.12 $8.65

TOTAL ROTATIONAL NET RETURN $241.72 Capitalization Rate 0.08 CAUV VALUE/ACRE:

Net Return/Cap Rate $3,021.45 SAY $3,020 2018 Value $3,810 ADJUSTED CAUV VALUE $3,420

Cropland, Simple Average CAUV Value by Productivity Index

2011‐2019 PI 2011 2012 2013 2014 2015 2016 2017 2018 2019

0‐49 $ 300 $ 350 $ 350 $ 350 $ 350 $ 350 $ 350 $ 350 $ 350

50‐59 328 362 516 700 518 466 430 400 378

60‐69 632 610 1,218 1,778 1,371 1,235 1,061 896 731

70‐79 1,126 1,147 1,958 2,728 2,347 2,255 1,969 1,723 1,469

80‐89

90‐99

100+

1,641

2,017

2,380

1,717

2,128

2,490

2,743

3,310

3,780

3,718

4,428

5,030

3,354

4,104

4,770

3,302

4,074

4,750

2,909

3,602

4,205

2,586

3,226

3,810

2,270

2,863

3,420

All Soils Average

$ 700 $ 719 $1205 $1668 $1388 $1310 $1153 $1015 $876

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_v - - - - - -- - - - - -_/ I I --

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_v - - - - - - -- -IJn _ - - - - - - - ~

I I I I I I I I I

Cropland, Average CAUV (Formula) 2004‐2019

$200

$400

$600

$800

$1,000

$1,200

$1,400

$135 $181

$505

$1,205

$1,388 $1,310

$1,153 $1,015

$876

$0 2004 2007 2010 2013 2015 2016 2017 2018 2019

Average CAUV (Formula) & Ohio Cropland Value – USDA Dollars per Acre, 2004‐2018

$6,000

$5,000

$4,000

$3,000

$2,000

$1,000

$0

USDA Tax YearCAUV

$2,920

$3,820 $3,900

$5,190

$5,850 $5,800 $5,780 $5,850

135 181 505

1205 1388 1310 1153 1015

CAUV = 17.4% of USDA value

2004 2007 2010 2013 2015 2016 2017 2018

D •

Average Woodland Value CAUV Formula

2015 2016 2017 2018 2019

Slope 25% or Less Maximum $3,030 $3,040 $2,575 $2,190 $1,840

Median $230 $230 $230 $230 $230

Average $603 $563 $459 $383 $325

Minimum value: all slopes $230 $230 $230 $230 $230

Number of soils at minimum value: slope 25% or less 1,974 2,128 2,128 2,130 2,130

HB 49 – Conservation Land

Land used for conservation practices (25%) or under a qualifying retirement or conservation contract: ◦ Receives lowest value in the Table ($230). R.C. 5713.31

Under contract with federal government: ◦ As of January 1st of the tax year starting with 2017 reappraisal/update counties R.C.5715.01(A)(3)

◦ If use changes sooner than 36 months after initial certification, auditor recoups extra tax savings. R.C. 5713.34

31

WILLIAMS FULTON

43 42

Statewide average is 37%

WOOD

S2

ASHTABULA

29

TRUMBULL

44

V-6C (2018) Source: DTE 114 2018 CAUV Value

as a Percent of Market Value

MERCER 24

DARKE 33

PREBLE 38

BUTLER

HURON SENECA 2344

ANDOT RAWFORD52 24 RICHLAND

'-,__r-_,._----f 37

AUGLAIZE MORROWl.._ 46 40

LOGAN

50 UNION

r---~-.L. 46

MIAMI

42

CHAMPAIGN 52

CLARK

LICKING

29

MONTGOME 51 35 46

GREENE 37

MADISON

FAYETTE 38

PICKAWAY 39

WARREN CLINTON

24 37

SUMMIT PORTAGE 25 29 f------l

MAHONING

37

'--

%of Market No. of Counties

10 - 29 D 20 30 - 39 30 40 - 49 D 26

~ 50 D 12

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Questions? www.tax.ohio.gov

Government, Real Property Tax

Ohio Deptartment of TaxationTax Equalization Division

614.466.5744

[email protected]

614.466.4959

[email protected]

mailto:[email protected]

mailto:[email protected]

www.tax.ohio.gov

Current Agricultural Use Values (CAUV) TY 2019 Agricultural … · 2019-07-08 · Introduction....

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