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Iowa’s ag property assessments going up

By Staff | Apr 10, 2009

Ag producers who haven’t seen their new ag property assessments yet, should get prepared for sticker shock.

The state has ordered an average increase of 48 percent to the 2009 agricultural land and building assessments. The Iowa Department of Revenue said the increase is due to higher crop yields and prices, between the years 2002 and 2007.

Three-fourths of Iowa’s counties will have an increase in productivity value between 40 to 60 percent, while eight counties will increase more than 60 percent, and 19 counties see less than 40 percent. Monroe County will see a mere 16 percent increase in southeast Iowa, while Mills County in southwest Iowa leads the state with a 71 percent jump.

Jeanette Thanupakorn, Webster County assessor, said assessment rolls have yet to be mailed out.

“They’ll go out right before the 15th,” she said, referring to the April 15 deadline mandated by the Iowa Department of Revenue.

Thanupakorn said her office is handling notifications for more than 16,000 parcels of land.

“We’re working on getting things printed out and put into envelopes,” she said.

Ag property owners will have from April 16 through May 5 to protest their new assessments. Protests must be filed with a county’s Board of Equalization.

However, the full force of the state’s equalization order will not be felt by taxpayers, said county assessors. Iowa’s assessment law limits the annual change of the statewide taxable value of agricultural land and buildings to 4 percent.

Thanupakorn said that currently, ag land is assessed at 98.3 percent of its actual taxable value. But the Department of Revenue is proposing cutting that back to 65 or 66 percent. That number will be made known later this year, she said.

The new rates will affect tax collections due in fall 2010 and spring 2011.

Tim Johnson, a senior research and policy analyst for Iowa Farm Bureau, said the real impact on farm producer’s taxes will not be the increase to taxable values, but on the tax rates local governments set on the new valuations.

“This is just the beginning of the process,” Johnson said, noting that local governments won’t be setting tax rates on these new valuations until next March. “That’s why we urge producers to hold their local governments accountable” during public budget hearings.

If the higher values create more money than taxing entities need, the individual tax rates can be lowered. Taxing entities include counties, townships, cities, public schools, community colleges, hospitals and Extension.

Iowa agricultural land and buildings are assessed on productivity and not market value.

Commodity yields, prices and expenses from the 2003 through 2007 crop years are used in the actual productivity formula to arrive at the assessed value of ag land, a formula that Farm Bureau helped the state devise years ago.

“The impacts vary widely in each county,” Johnson said.

Productivity numbers are affected by flood, drought and local demand for commodities. The ravages of weather on crops and land value in 2008 won’t have an effect in Iowa until next year.

Marianne Welsch, Hancock County assessor, said her county’s notices would be mailed Wednesday. Ag property assessments will rise 56 percent, she said.

“But in reality,” Welsch said, “rollbacks will mean an actual 8 percent increase.

“That’s a lot easier to stomach.”

Contact Larry Kershner at (515) 573-2141 or by e-mail at kersh@farm-news.com.

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