Agriculture is a vital part of Indiana’s economy, supporting more than 245,000 Hoosiers. Recently, the industry has dealt with severe financial difficulties due to a combination of problems including historic low crop prices, rising business costs and poor weather.
It’s important for lawmakers to do everything we can to support the agriculture industry. In recent years, the Indiana General Assembly passed a series of short-term bills to prevent major property-tax increases on farmland, which proved to be effective.
This session, the legislature is working to pass a long-term solution to protect farmers from drastic increases in property taxes. Last summer and fall, a legislative study committee took a comprehensive look at the issue and recommended a bill that would provide lasting reform.
Senate Bill 308, which I co-authored, would address these issues and provide property-tax relief for farmers by eliminating the use of the U.S. Department of Agriculture’s new soil productivity factors, change the formula to limit annual increases in assessed value and using the most recent data available to determine the base rate for assessing property taxes on farmland.
Setting a floor for the capitalization rate and updating soil productivity factors will help Indiana’s agriculture industry bounce back. SB 308 is projected to decrease the property-tax burden on farmers by almost $50 million in 2018 alone.
The current assessment formula has resulted in a 47-percent increase in farmland property-tax rates in eight years, while other property taxes have decreased.
Passing this legislation would provide more permanent reform for our farmland property-tax system.
SB 308 unanimously passed the Senate this week and now heads to the House of Representatives for further consideration.