Farmers will get property tax relief under a bill approved Thursday by the Indiana General Assembly that passes a burden of about $136 million onto other classes of taxpayers over the first three years.
Before adjourning for the year, lawmakers approved a bill that would change the formula in calculating the base rate per acre of farmland, the starting point for property tax assessment.
Proponents of the bill, including the Farm Bureau, said it would help farmers who say they’ve suffered tighter margins, and to help stabilize a dramatically rising farmland tax system.
The bill passed the Senate 44-6 and the House 84-12.
“It provides some relief,” said Sen. Brandt Hershman, R-Buck Creek. He said the bill "represents a significant long-term solution” for agricultural land valuation.
The current assessment formula was creating difficulties for farmers. It has resulted in a 63 percent increase in farmland property tax rates in nine years, while other property taxes have decreased, Hershman said.
Lawmakers attempted to fix the problem last year. But the method passed this year would reduce farmers’ bills by changing the base rate formula—this time setting a capitalization rate between 6 percent and 8 percent, and using more recent financial data.
But critics of the bill, including Rep. Dave Ober, R-Albion, said it "creates a large shift of property tax burden to residential property owners.”
The impact of the bill is about $136 million over the first three years, Brown said, which would be shifted to other property owners, although the impact will vary widely by county and taxing district. In places where tax bills are limited by tax caps, the change will reduce revenue to local governments.