House nixes change to farm land taxes

Thursday, January 28, 2010

JEFFERSON CITY, Mo. -- The Missouri House voted Wednesday to reject a plan that would increase property taxes for farmers with the best land and cut taxes for those with less fertile ground.

Property taxes on Missouri farms are based on the land's "productive value," which considers the potential earnings through agriculture. Last month, the State Tax Commission proposed increasing those productive values for higher quality land, cutting them for lesser land and keeping them the same for the worst.

The commission's recommendations take effect Jan. 1, 2011, unless both the House and Senate each vote to reject them.

Many lawmakers, the state Department of Agriculture and farm groups have condemned the proposed changes, warning of dire consequences for Missouri's economy. The Missouri Farm Bureau says the changes would result in an 11.5 percent increase statewide in the productive values of farms.

Rep. Brian Munzlinger, a farmer from northeastern Missouri, urged lawmakers to "stop the ridiculous increase in the value of farmland."

"This is not the time to raise taxes on anyone," said Munzlinger, R-Williamstown.

The House approved a resolution rejecting the tax changes 140-15. That sends the measure to the Senate, which is expected to debate its own similar version this week. Lawmakers eventually would need to pass identical measures.

Missouri's farms are divided into eight groups based on land quality, with the best farms in Grade 1 and the worst in Grade 8. The Tax Commission increased the value for farms in the four best categories, which generally are cropland, lowered values for the next three categories, which include pastures, and kept the worst category the same.

According to state tax records, more than 60 percent of Missouri farmland falls in the categories that would receive tax cuts. In most counties, the productive values for the bulk of the farms also would be decreased.

Counties with the largest concentrations of land facing tax increases are mainly in far northwestern and southeastern Missouri. More than 80 percent of the land in Atchison, Dunklin, Mississippi, New Madrid, Nodaway, Pemiscot, Stoddard counties would face higher property taxes.

The largest increase in productive value was for the best farms, which was raised from $985 per acre to $1,270. That covers flat properties with deep, ideal soils. The largest decrease was from $195 per acre to $147 for Grade 5 farms, which can be steep with serious drainage problems.

Missouri agricultural taxes are calculated by multiplying the productive value by 12 percent to come up with an assessed value, then multiplying that by the local tax rate.

Rep. Maynard Wallace, whose southern Missouri district includes some of the highest concentrations of low-quality land, said he supported the commission's decision because it would cut taxes for his constituents. Wallace's district covers Ozark County, most of Taney County and smaller portions of Howell and Stone counties. Of those areas, only Stone County has more than 1 percent of its farmland facing a property tax increase.

But Wallace said he doubted there was much chance that the tax changes would go through.

"I didn't get up and fight it because I figured there was no point in it," said Wallace, R-Thornfield.

Controversy over farm land taxes also has stalled Gov. Jay Nixon's appointee to the State Tax Commission. Commissioner Bill Ransdall, a former Democratic lawmaker, was named to the panel last year and started serving immediately because the Legislature was not in session. Ransdall's vote to approve the property tax changes has prompted senators to balk at confirming his nomination.

Farm tax is: HCR7

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