Farm land to face higher tax rate

Wednesday, February 15, 2012

Now is not the time to raise tax assessments on Missouri farmers, say proponents of resolutions in the legislature to repeal an agricultural land tax increase.

Under a policy set by the State Tax Commission in December, Missouri's most productive farm land will face a higher tax rate.

Recent natural disasters, market volatility and uncertainty surrounding efforts to pass a new federal farm bill are all reasons Leslie Holloway, director of state and local government affairs for the Missouri Farm Bureau, cited for not increasing agricultural property taxes.

The legislature may disapprove this change within the first 60 calendar days of the legislative session, and agriculture advocates, including the Missouri Farm Bureau, are encouraging them to do so.

Every two years, the state tax commission reviews agricultural land productivity values. Since 1995, these values, based on land quality grades from one to eight, have remained unchanged.

Two years ago, the Tax Commission tried to increase productivity values, but that reassessment effort was blocked by the legislature.

If the legislature doesn't act again, under the Tax Commission's December decision, owners of the most productive farm land will pay an average of 29 cents per acre more in taxes. Grades one through four are considered the most productive farm land, while grades five through eight include less productive crop land, forest and pasture land. About 65 percent of the state's agricultural property is grade five through eight, according to the tax commission.

"Nobody likes to see taxes go up, but 29 cents wouldn't break me. A couple less Cokes this week and we'd be even," said Cape Girardeau County farmer John Peters who farms 300 acres between Gordonville and Dutchtown.

Still, Peters said over the last couple years his operating costs have gone up dramatically leaving him with about the same percentage of profits despite higher commodity prices.

Seed corn has gone from $125 to $250 per bag, fertilizer has doubled and diesel fuel is more than $1 per gallon more.

"Everybody looks at the price and says, ‘Wow, look you're getting this much more for grain now,' but I say, ‘Look, I'm paying X amount more up front,'" Peters said. "Your risk is bigger."

Last year, a disaster declaration was requested for all 114 Missouri counties for one reason or another, Holloway said.

"The disaster situation has affected nearly every county in the state, whether it's flood or drought or wind and hail damage. This is a highly unusual year from that perspective and we don't think it's a good time at all to be increasing property taxes on any farmers who might have been affected," Holloway said.

Rep. Steve Hodges, D-East Prairie, said a tax increase wouldn't be welcome news to Mississippi and New Madrid county farmers who are still recovering from last year's flooding due to the intentional breach of the Birds Point levee by the U.S. Army Corps of Engineers.

"The cost of seed, the cost of fuel, the cost of insurance, the cost of everything on top of the loss my district suffered this year with the flooding of the spillway, when you upgrade the value of agricultural property like they're suggesting here, we're really putting a strain on our agriculture people," Hodges said.

The Missouri Bootheel is home to some of Missouri's most productive crop land and would likely face the largest increases in value, Hodges said.

For property with a soil grade of one, productivity values would go up from $985 per acre to $1,065 per acre under the tax commission's proposal.

House Concurrent Resolution 8, which would repeal this assessment increase, is scheduled for a third reading today. Similar legislation in the Senate, known as Senate Concurrent Resolution 19, was the topic of a hearing by the Senate's rules committee Feb. 7.


Pertinent address:

Jefferson City, Mo.

Map of pertinent addresses

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