By Alaa Abdeldaiem
INDIANAPOLIS – Jack Maloney has farmed all his life.
As a fourth-generation farmer, Maloney has never had another job. His 2,800 acres of corn, soybeans and wheat in Brownsburg, Indiana, have been around since 1861, and Maloney said he hopes they’ll be around for much longer.
But the state hasn’t made it easy, Maloney said.
“There’s a bunch of people in [the government] dictating how we as farmers should be doing our jobs, and all they’ve done in the past is figure out how to tax us heavier,” Maloney said.
Maloney believes the impact Senate Bill 308 will have on farmers like himself will be no different.
Starting July 1, the department of local government finance will use a formula that is expected to limit annual increases in assessed value and use the most recent data available to determine the base rate for assessing property taxes on farmland.
According to Sen. Eric Bassler, R-Washington, the new formula will be based off of projected revenue on the farmland, using two-year instead of four-year averages for consistency. A capitalization rate of six, seven or eight percent will also be used in the formula’s denominator.
Bassler said he’s confident the adjustments will address the very issues farmers like Maloney have had to struggle with.
“The number one thing we think we’ll accomplish with this bill is we’re not going to continue to see skyrocketing property taxes on farm land,” Bassler said. “Over the last eight to 10 years, we’ve seen about a 63 percent increase in property taxes for farmland, and if we would not have acted we would have seen those types of increases in the future. We always want to be fair and appropriate when it comes to taking money from taxpayers, and to see that kind of increase over the last 10 years is just unreasonable.”
Under the new formula, farmland property tax bills are projected to decrease by $16.5 million in 2017 and $48.7 million in 2018.
Despite the projected decreases, Maloney is still skeptical. Formula changes in the past have done more harm than good, he said, leaving him to wonder how much better another change can be.
“I just don’t think it’s going to be in our benefit,” Maloney said. “I’m very careful about having somebody who doesn’t know what’s going on make legislation and change a calculation for something they don’t understand.”
Sentiments like Maloney’s come as no shock to Bassler. However, Bassler said he hopes this outcome will be different.
“I’m not a farmer, and if I were a farmer, I’d be very frustrated right now because of the increases we’ve seen,” Bassler said. “We’ll have to monitor the formula over the next few years to make sure we got it correct, but hopefully the proof will be in the pudding and farmers see that their property taxes level out and start going back down and start to believe it’ll work.”
Alaa Abdeldaiem is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.