INDIANAPOLIS – Indiana farmers would avoid $57 million in property tax increases under a bill the Indiana House passed unanimously Monday.
Senate Bill 319 was fast-tracked through the legislative process and is the first to go to Gov. Mike Pence for approval or veto.
Rep. Don Lehe, R-Brookston, said the bill needed to move quickly because county officials need the information to finalize 2013 tax bills.
The ultimate goal is to protect farmers from higher property taxes resulting from an increase in the soil-productivity factors used to assess the value of farmland.
The legislation would delay, for an additional year, the use of the soil-productivity factors proposed by the Department of Local Government Finance and already delayed once by lawmakers.
The factors would create a 15 percent to 45 percent increase on farmers property taxes, depending on location.
The legislation also requires the state taxing agency – in cooperation with the Purdue University College of Agriculture – to submit a report to the General Assembly by November 2013 including:
Proposed soil-productivity factors to be used in the assessment of farmland.
An explanation of the methodology used to determine soil-productivity factors.
Data from counties used to determine the proposed soil-productivity factors.
Evidence of testimony and written comments provided to the state finance office by taxpayers and other stakeholders concerning the proposed soil-productivity factors.
Lehe said the bill does not shift property taxes from farmers to other property owners because the increase has never taken effect. In theory, if the factors took effect, it might reduce the taxes on other classes of property, such as homesteads or businesses.
Lehe noted that in the years since the property tax overhaul, farmers have seen large increases in the assessed value of their land, and this is one way to slow that down.
In 2006, the agricultural land base rate – used as the foundation for determining tax value and adjusted according to soil productivity – was $880 and is expected to be $1,760 in 2014. By 2016, its projected the base rate will be $2,430.