Hats off to every legislator who helped pass Senate Bill 319 to stop the Department of Local Government Finance from implementing a plan that would have raised land assessments by altering soil productivity indexes that affect property tax assessments without input from specialists. Governor Pence signed it, his first bill to ever sign, last week.
While that's an extreme positive for Indiana agriculture and was a priority for Indiana Farm Bureau this session, Bob Kraft, an Indiana Farm Bureau lobbyist, doesn't want farmers to misunderstand what this action means. He doesn't want them to think that their woes related to increasing property taxes are over.
This bill requires DLGF to confer with Purdue about soil productivity index values and report back by Nov. 1. However, the general funding formula that assessors use to determine bare land assessment will not be under review. Senate Bill 319 does nothing to affect the formula.
Kraft doesn't expect further action this session that would cause anyone to look at the formula. The only exception might be if enough people pressure legislators to go further and review the validity of the formula too. Originally worked out with Purdue's guidance several years ago, it's the formula that determines base values for average bare farmland each year. Several factors are involved, including prices of commodity crops. The formula looks at six previous years, and throws out the highest. The oldest year rolls out annually and the next year in line rolls in for calculation purposes.
The problem is that with increasing commodity prices in general over the past several years, the formula has continued to deliver higher assessed valuation, which results in higher property tax bills. This trend will not be affected by Senate Bill 319 becoming law. What that bill did was prevent DLGF from heaping another increase on top of the built-in annual increase.
Expected assessed evaluation for bare farmland and property tax bills is to go up over the next several years unless there is further action by the Indiana General Assembly.