There's been no shortage of politicians and government officials trying to convince farmers how the recently approved property tax bill that will soon become law is a good deal for them as well as homeowners. But not all farmers are buying the argument. Many still think while it may have been a victory for homeowners, including themselves in many cases, it won't turn out to be such a good deal for farmers. That's because homeowners got the bulk of the breaks, including a 1% of assessed value cap on their homes as the maximum amount of property tax they can pay.
The rub is that farmland was given a 2% cap, although the formula used to assess farmland is still intact, and it's likely to produce higher values for each of the next several years, due to the way it's calculated and current price trends in agriculture. However, the rest of ag items, including all buildings on the farm and farm equipment, received only the 3% cap, the same cap placed on small business operations across the state.
One farmer told us in no uncertain terms that it was a disappointment. "What they don't realize is how much we have tied up in machinery out here," he notes. "Having a 3% cap on farm equipment will turn out to mean that we could still see significant increases in the amount of property tax we have to pay."
That could happen since no surefire caps were placed on government spending. The general fund for schools was completely removed from property tax levies, no doubt a good thing for farmers. If a levy is left open, even if it's reduced, history says it will grow back to where it was before, if not higher. The only way to get rid of a levy from causing increase sin the future is to eliminate it, say such sources as Bob Kraft, a legislative specialist with Indiana Farm Bureau.
"We might be better off just selling our own equipment and renting it," says the farmer, only half in jest. He even quipped that may be what he should do is hook up with a farmer in Illinois or some state where property tax on equipment is either low or non-existent, then rent it from him and bring it here to farm.
While that may not be a practical solution, his point is clear. No number of platitudes coming from government and political folks trying to sooth farmer's ruffled feathers will erase the fact that property taxes can still rise much quicker for farm buildings and farm equipment, which makes up a sizable investment for almost any farmer. Not all farmers own land, but nearly all farmers own equipment. If they don't own land but own equipment, they're looking at a 3% cap, one that can still allow wiggle room for property tax increases.