Licking County auditor Mike Smith spoke in Johnstown Village Council chambers May 19 to a meeting of the Northeast Suburban Real Estate Association.

Licking County auditor Mike Smith spoke in Johnstown Village Council chambers May 19 to a meeting of the Northeast Suburban Real Estate Association.

Smith had some good news for neighborhood homes whose owners were lucky enough to sell, and a lot of bad news for farmers who rely on the CAUV (current agricultural use valuation) for property tax.

Smith was invited by Amy Albery, a title agent at Ohio Title and member of the association.

"When we are handling our customers, we want to be able to give them the best information," Albery said. "We asked him to talk about what is happening in the county. Reappraisals are coming up this year, and the current agricultural use valuation is very important to hear about. It will be going up because the state is mandating that it is going to increase, based on soil types."

Smith said that Licking County was the only county in Ohio that had a practice of adjusting property valuation for property tax purposes whenever a property sold. Smith said that while it might sound like a good idea, it led to unfairness and was a bad practice.

"The major change that they are dealing with is that we are no longer going to market-adjust property as it transfers," Smith said. "Either it was genius or it was stupid (to be the only county that adjusted at each sale), and I think it was stupid on our part."

Instead of adjusting values for each sale, values will be adjusted for whole neighborhoods, so that similar properties pay similar taxes.

"We are the only county of 88 counties that does that," Smith said. "We'll try to equalize all the values. When we market-adjusted the transfers, they spiked, and nothing happened with the property next door that did not transfer, so you would have these huge inequities, neighborhood to neighborhood. We're going to try to level that over the next three to six years."

The other major topic Smith addressed was Ohio's practice on taxing agricultural land based on current agricultural use valuation.

"The farming community is going to see a large increase in their valuations due to the state soil values," Smith said. "Locals have no control over that and the property owner has no right to appeal, so it's kind of a double whammy. They'll see that next year, on their 2011 taxes payable in 2012. There is nothing you can do about it."

Under state law, property valuation is based on crop prices, and since crop prices have been rising dramatically around the world, property values follow.

"Other counties that have had it, during the reappraisal years, which is every six years, have seen large increases," Smith said. "Fairfield County had theirs last year, so we had a heads-up. They're grabbing pitchforks, and rightfully so.

"But it's a state-run program," he said, "and the state needs to do something about it. The formulary, which makes sense when you look at it, says this is what the folks are making off the soil, with corn prices and bean prices going up and up, so the soil values go up."

The six-year cycle means that the jump in valuation is a big one when it comes.

"You get four or five good years in a row, and you throw out a low year and a high year, it can really jump," Smith said. "It's doubling and tripling. Not very many are tripling, but most of the soils are going to double."

Despite the increase in CAUV values, property taxes are lower for agricultural use than commercial use.

Anyone wishing to file for CAUV valuation must do so by June 6.