Bob Cherry knows what it's like to farm. He's still somewhat involved in a farming operation with his brother and nephews near Greenfield, Ind. At the same time, the Indiana Farm Bureau legislative expert also knows what it's like to sit across the aisle on the other side of the desk. He's a Republican representative in the legislator from Hancock County.
Asked if anything good came out of this session of the legislature, concluded last month, he quickly says yes, and points to tax relief for farmers as perhaps the biggest victory. Note that when he made his comments Governor Mitch Daniels had yet to sign the bill granting this relief. But the bill passed both the House and Senate so easily that it should be veto proof, Cherry notes. For a bill that was vetoed, however, it would be late next fall when the new legislature meets before the item could be addressed again.
"There was hard work on both sides, and there was a bill in both the House and Senate aimed at changing the assessment formula for bare farmland," he says. Basically, the language that passed calls for lopping off the highest year and averaging the five remaining years in the formula used to determine the value of average bare farmland in the formula.
The formula was devised several years ago with help from Purdue ag economists. When grain prices are cheap, the formula holds values down. But there's a lag time, and the high-priced years are now coming into play. The assessed value of bare farmland was locked at $880 per acre for a couple of years coming out of the Kernan administration. It shot up last year, and would have gone up more in future years without changes in the formula.
"What it will do is save $75 million for farmers and landowners over the next three years," Cherry says. "The savings are estimated to be $18 million the first year, then $30 million the second year and about $28 million the third year."
The difference between years occurs because of variations in commodity price from year to year. It was one of the factors used to determine how bare farmland should be assessed.
Indiana Farm Bureau fought long and hard to get relief for farmers from property tax, Cherry notes. They didn't win the fight to keep the property tax caps off the ballot next November. It must pass on a general ballot before it can become a Constitutional Amendment.