The Indiana State Department of Agriculture is fielding lots of questions about the impact of the property tax reform passed by the Indiana General Assembly on agriculture. Many of the questions fall squarely in the lap of Andy Miller, ISDA director. He and his staff are doing their best to help people understand how the new reform works, why it's beneficial for agriculture, and why some fo the things they think they're hearing or seeing aren't necessarily the way the new tax plan will work.
Number one, Miller is convinced that the most comprehensive tax reform since the Bowen Administration in the early 1970's is good for farmers. ISDA's estimates project that property taxes will go down for 90% of all farmers in Indiana. That's based on U.S. census data and their interpretation of farm classifications.
"We believe this is good for farmers and for agriculture," Miller says. "There are some parts which people just need some help to understand. Once we have a chance to explain it, they usually understand why we think it's good for agriculture."
One of the most attractive parts of the bill is that it eliminates some property tax levies completely. That includes removing the general fund support from property taxes and funding it instead entirely with state dollars. The increase in sales tax that went into effect April 1 will help cover what property tax at the local level no longer pays for. Another major levy eliminated includes welfare support.
"Taking these levies off is key," Miller insists. "If they were just reduced, they would tend to grow back over time. But since they're eliminated completely from the property tax roles, they should be gone for good."
Miller also believes that farmers benefit more than some others from the decision to shift support of general funds for schools and welfare support to the state coffers. Now everyone who pays sales tax will help carry the freight for those needs, he notes. Meanwhile, farmers pay sales tax on domestic items they purchase like anyone else, but they don't pay sales tax on equipment and other goods used to produce food and fiber. He believes that should prove to be a plus for agriculture.
Don Villwock, president of Indiana Farm Bureau, agrees that removing the levies completely is great news for agriculture. "That's a very good part in the bill," he says. Villwock is less than enthusiastic about some other parts of the plan, and questions if farmers will truly be better off long-term. However, he notes that in the short-term, removing these levies, along with other changes in the bill, should be positive for many farmers.