Farmers Push To Delay Property Tax Hike - Again

INDIANAPOLIS — Farmers would wait one more year to face higher property taxes based on the value of their soil under legislation a Senate committee approved Monday.

Senate Bill 205 imposes another one-year delay on the implementation of soil productivity factors that could boost tax payments for farmers while lowering taxes for other property owners. The Senate Agriculture Committee approved the bill unanimously and then sent it to the Tax and Fiscal Policy Committee for further consideration.

Katrina Hall, the director of state government relations for the Indiana Farm Bureau, testified for the bill – making it the fourth year in a row she’s advocated a delay. She told lawmakers she “did not wish to be here to ask again” but said farmers are facing a large increase in property taxes without a delay.

Hall said that due to formulas used by the state in determining farmland property values, agricultural property taxes have increased 33 percent – or about $100 million overall – between 2007 and 2013. They would go up again by roughly the same amount under the changes the Department of Local Government Finance had planned to make in the soil productivity factors.

Sen. Jean Leising, R-Oldenburg, the bill’s author, said farmers are “not ready” to face the bill increase.

Since the General Assembly voted in 2013 to delay the use of the DLGF’s soil productivity factors, the agency has been working with Purdue University officials to refine them and have brought the projected tax impact down significantly, according to the nonpartisan Legislative Services Agency. But that work is ongoing.

Farmland value is assessed by a three-step process that consists of the base rate, the soil productivity factor, and the influence factor.

The base rate – depending on crop yield, production cost, and grain prices – is reliant on six years of data. This base rate has doubled within the past seven years and is projected to triple in the next 10 years.

The soil productivity factor is the second aspect of the farmland assessment. It determines the crop capability of the ground itself. This factor has not changed since its installment in 1979, which is why the proposed change would increase agricultural property taxes.

The third aspect that affects the taxation of farmland property is the influence factor that determines what type of ground it is, whether it is subject to flooding, and whether it is pasture grounds or a wooded area.

Levi Lotz is a reported for TheSatehouseFile.com, a news website powered by Franklin College journalism students.