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| Farm Bureau sees no relief for farmers in property tax caps |
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“Agriculture is not likely to receive much tax relief at all from the property tax credits,” said Dr. Larry DeBoer, Purdue property tax expert.
Indiana Farm Bureau has been an advocate for serious and permanent property tax restructuring since its founding. Recently, many public and elected officials have expressed surprise at Farm Bureau’s strong objection to the property tax caps currently in state statute and being proposed for inclusion in the state Constitution. Recent testimony by Dr. Larry DeBoer at an October meeting of the Indiana Commission on State Tax and Financing Policy confirmed Farm Bureau concerns about property tax caps.
Reviewing the latest property tax data from 68 Indiana counties, DeBoer confirmed shifts in the property tax burden among classes of Indiana properties. Not surprisingly, homestead properties’ tax bills went down from 2007 to 2009 for 95.5 percent of homeowners by an average of 32.2 percent. Commercial, industrial, and utility real property owners paid 18 percent more in 2009 than 2007. Agricultural property taxes also increased, but primarily because of increased farmland assessments.
A recent study done by the Legislative Services Agency demonstrated the effects of the property tax cap circuit breakers on various classes of real property. Homeowners received a small amount of tax relief due to caps because they received so much from homestead deductions that few qualified for the tax cap. Only about 5.6 percent of property tax cap savings went to homeowners. Rental housing and vacation homes received the highest tax relief from property tax caps as they received 55.17 percent of the cap credits. Commercial, industrial and utility real property received about 23.27 percent property tax credits. All of personal property received 15.4 percent of credits, while farmland received only 0.55 percent of the property tax credits.
In a Nov. 24 statement, DeBoer addressed the property tax situation for farmland more directly. Indiana farmers could see a substantial increase in property taxes during the next few years if the state’s farmland taxation formulas remain unchanged. DeBoer doesn’t think a two percent property tax cap on farmland will be of assistance to farmers because of their rural locations and rising farmland assessments.
Indiana Farm Bureau will continue to seek meaningful controls on property taxes. However, as numerous reports indicate, the property tax caps provide unequal relief to classes of taxpayers and we will continue to oppose their inclusion into the state Constitution. True property tax reform should reflect a correlation to government services provided to taxpayers and to a taxpayer’s ability to pay. The unequal property tax caps proposed for the state Constitution are still not equitable for farm properties.
Randy Kron,
Vice President,
Indiana Farm Bureau |
| 1/6/2010 |
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