Indiana Farm Bureau's latest Policy Dispatch issued weekly during the legislative session and as needed otherwise urges farmers to let their Farm Bureau representative know how much they are paying in property taxes, and how much they are going up. They're trying to build the case that farmers are paying an unfair share since the circuit breaker system began. Homeowners got more relief, plus the base tax value on farm property keeps rising due to a formula worked out several years ago with the help of Purdue University ag economists. As crop prices and land prices go up, so do value assessments.
Farm Bureau helped hold off the Department of Local Government and Finance form changing soil productivity ratings, which would have caused a $57 million increase in property taxes statewide each year. This is the third straight year they've stopped them, but DLGF is supposed to work it out permanently with Purdue this time around.
Katrina Hall, Indiana Farm Bureau lobbyist, says they can't get on to reducing levels until they get that hurdle out of the way. Many legislators confuse the two.
What IFB would like to see is the soil productivity issue put to rest, and then work started to change the formula so that farmers pay less, not more each year, or at least pay a lower percentage, of property taxes.
Here's the rub. An assessor has been exploring the property tax issue for us, and he agrees changes need to be made. However, he says there's no way to overlook the fact that while homeowners and others pay less on a percentage basis compared to farmers, they are paying on what their property is actually worth, or close to it. Farmers are not paying on anything close to the real current property value. It was done that way when the tax system was changed to a market value system over a decade ago. Farmland was considered valued at market value but for value of a product in service. I'll stop there. It goes from complicated to crazy.
The point is that Joe Homeowner is going to ask why his $150,000 home is valued at $140,000, and your 100 acres of farmland currently worth a million dollars are valued at $200,000, at about $2,000 per acre, more or less, based on the formula and soil indexes. Why isn't your land taxed at $10,000 per acre?
You know that's not realistic. You know land doesn't need much in return from taxes in services like a house for a family of four. You know that would turn the system on its head and make farming extremely tough.
You know that. Joe Homeowner doesn't' know that.
Hopefully, there is a solution out there somewhere. But if it becomes an open fight, it may be a difficult argument to win.
Meanwhile, send the information in Farm Bureau is looking for. If it helps them build a data base to support property tax changes helpful to farmers, it's worth it.