Indianapolis — While the assessed value of most residential and commercial property remains on a downward trend, the state continues to increase the assessed value of already prized farm land.
The Indiana Department of Local Government Finance sets the assessed value for farm ground based on the value of the land and commodity prices.
Howard County Assessor Jamie Shepherd said the state has set the assessed value for farm acreage for 2012 taxes payable in 2013 at $1,630 per acre, which is a 9 percent increase. That follows a 16 percent climb on farm acreage for 2011 taxes payable at 2012, which set the rate at $1,500 per acre.
Shepherd said since 2005 taxes payable in 2006, the state has raised the assessed value of farm ground from $880 to $1,630 for taxes due in 2013, an increase of 85 percent.
The impact on local farmers will be softened because the property tax rate for Howard County will decline as a result of the higher assessed value, she said.
“With the higher assessed values, the tax rate will decline,” Shepherd said. “Some farmers may be hitting the 2 percent property tax caps put in place by the state.”
Bob Craft, director of state government relations for the Indiana Farm Bureau, said the assessed value is set by a formula and the Farm Bureau has no input in the data used.
“We have encouraged legislators to change the formula,” Craft said. “Hopefully it will be considered in 2013.”
Craft said because the price of farm land and commodity prices are increasing, it is driving up the assessed value.
“Agriculture has been good recently,” he said. “Farm land is going up and everything else is going down. The balance is shifting; farm land is paying a greater share of the burden.”
Craft said currently the formula lags behind by a couple of years and the Indiana Farm Bureau would like to see a change where it’s more reflective of what the actual value of land and commodity prices are at a given time.