FARM BURDEN: COURT RULING MAY LEAD TO HIGHER FARM TAXES

The state's farmers would be burdened with higher property taxes if a Cole County Circuit judge's ruling stands, a Missouri Farm Bureau official said Wednesday.

Estil Fretwell, director of public affairs for the Jefferson City-based organization, said farmers statewide could be faced with paying an additional $5 million to $10 million annually in property taxes.

Fretwell's comments came on the same day that the attorney general's office announced that the state would appeal the ruling by Circuit Judge Tom Brown.

The judge issued the ruling last month in a lawsuit brought against the State Tax Commission by the Missouri Growth Association, a developers group.

"This is a matter of great importance to the farmers and to the Missouri Legislature," Nixon said in a prepared statement.

"The Missouri Constitution gives the Legislature the authority to make taxing choices, and I respect and support their decision not to increase farm taxes at this particular time when the farm economy is hurting and commodity prices are low," he said.

Nixon is seeking a ruling from the state's Supreme Court before tax bills are mailed out this fall. He said he would seek a stay of enforcement from the Supreme Court so county officials won't have to redo the assessment process while the case is on appeal.

In 1998, the Legislature rejected a State Tax Commission proposal that would have increased property tax assessments on farm land by as much as 17 percent.

The proposal would have raised agricultural land assessment values by 13 percent, on average.

The Senate rejected the proposal by a 26-4 vote; the House by a vote of 108-44.

As a result, county assessors would have been required in 1999 and 2000 to use the same agricultural land values used in 1997 and 1998.

But Brown ruled that the Legislature's resolution rejecting the Tax Commission reassessment plan was invalid because it amended a law and wasn't read on three different days in the House and in the Senate.

The judge also said the Legislature's rejection of the Tax Commission plan violated the separation of powers clause of the Missouri Constitution even though the governor signed the resolution.

Agriculture land is assessed on the basis of soil productivity. There are eight grades, ranging from land valued at $30 an acre to $985 an acre.

The proposal would have increased land values in all but the lowest category. The state's most productive farm land would have been valued at $1,115 an acre.

Farm land is assessed at 12 percent of the productive value.

As a result, 100 acres of the state's best farm land currently carries an assessed valuation of $11,820. It would have carried a $13,380 assessed valuation under the commission proposal.

Charles Kruse, a Dexter farmer and president of the Farm Bureau, said the ruling comes at a bad time for farmers who already are facing hard times financially.

"We fought too hard for the legislative rejection of the increased agricultural land values to now let the courts step in mandate an unjustified property tax increase on farmers," Kruse said.

The Tax Commission's proposal to increase land values was based on a University of Missouri study that takes into account various factors in setting the productive value of farm land.

The Legislature and the Farm Bureau argued that the study overstated the productivity value of the state's farm land.

The commission is required by law to review agriculture land values every two years and make recommendations to adjust those values, if warranted.

State Sen. Peter Kinder, R-Cape Girardeau, said lawmakers were right to freeze tax assessments on farm land and said the judge's ruling is "a terrible blow" to farmers.

New Madrid County farmer Clyde Hawes served as county assessor for 20 years. He currently is the county's presiding commissioner.

Hawes and his son farm about 1,200 acres. They grow corn, wheat, soybeans and cotton.

The court ruling could hit Hawes and other farmers in the pocketbook.

"Right now, any increase at all on the farmer would almost be devastating," he said.

Hawes said he isn't opposed to adjusting farm land values when warranted. But he said lawmakers and not the Tax Commission should have the final say.