The December editorial in Indiana Prairie Farmer took a tongue-in-cheek approach to what would happen if the legislature ducked the property tax debate once again, and applied another band-aid fix in hopes of getting through the next election, rather than dealing with the root problem once and for all. With just a few days left in the regular, scheduled session of the ;'08 Indiana General Assembly, it's still unclear whether the final outcome of all the hoopla about property tax reform will be significant change, just another band-aid approach, or worse yet, nothing at all.
The December editorial asked readers to consider what Indiana's property tax and political landscape might look like as far out as 2025 if the Indiana General Assembly ducks the issue once again, or if it acts but only applies what turned out to be another band-aid when a tourniquet or complete blood transfusion is needed.
The story line in the editorial led to the point that years down the road, not only would property taxes still be around, they would be astronomically high, and at the same time, there would still be the higher sales tax passed in an attempt to hold down property taxes. In other words, if you think there is a property tax crisis in this state today, which nearly every farmer believes there is, according to the whimsical editorial, 'you ain't seen nothing yet.'
Whimsical, perhaps, but yet maybe the editorial was not that far off the mark. Honest efforts at finding a resolution seemed to dissipate back into the old, familiar political rhetoric last week. At one point the Democrats even proposed starting over, this deep into the session, and scrapping the governor's plan. All indications are, however, that they will not make good on that suggested threat.
However the debate winds up, farmers may be left on the outside looking in this time around. Listen to nearly any news report or read almost any story about this process, and you won't hear farmers or farmland property taxes mentioned. Instead, most reports focus on trying to explain to homeowners, who make up the lion's share of voters, how 1% circuit breaker systems mean their taxes won't go up very much at one time in the future.
But unless levies are removed and the property tax monster is defanged, all that does is make someone else pick up the slack. That falls partly to small businesses, which includes farmers. With a 2 or 3% cap, farm property taxes can rise higher before anything slows down the throttle leading toward higher property tax bills for farmers. And unless someone takes action soon, which appears highly unlikely, assessed land values are likely to increase substantially just because the formula used to determine bare farmland assessed value will result in higher assessment prices over the next few years, based upon the fact that the formula uses a moving target that shifts up one year at a time. Higher grain prices are part of the formula, and should increase the assessed valuation. Once years such as 2006 begin coming on board, property taxes, unless handled sooner rather than later, may sweep in and really increase the assessed value of bare farmland, which in turn will increase the amount of property taxes each farmer must pay.