Farmers Would Like to Wave Good-bye to Property Taxes Someday

Candidates for governor differ on response to the idea.

Published on: Sep 18, 2008

Suppose the property tax issue was put to a referendum. Next time there's a major election, this question is on the ballot in Indiana: Would you favor phasing out property taxes by 2015? Would it pass? Would it be a slam dunk? Only someone with a crystal ball or divine knowledge fo the future knows for sure, but there are mixed signals in public that might not make the answer as clear cut as you might think, or would like.

Indiana Prairie Farmer posed that and nine other questions in a survey sent exclusively to farmers who have received the Master Farmer award in the modern-day program. Today, it's sponsored by Indiana Prairie Farmer and the Purdue University College of Agriculture. Jay Akridge, interim dean of the Purdue ag college was aware of the survey, but Purdue did not participate in nor endorse the survey in any way.

You will find the survey stories in the October election issue of Indiana Prairie Farmer. Later, that information will appear on the Web. This is just another short peek into the data that should whet your appetite for what the entire poll discovered, and what it might mean come election day.

We asked participants: Would you favor phasing out property taxes by 2015? No information was provided as to how that might be done, and how the costs that are now covered by money collected through property tax levies would be garnered in the future.

Four out of five of the more than 60 farmer participants in the survey, or 80%, answered 'yes' – they favored such a proposal. Please understand that to our knowledge, no legislator has designs on introducing such a proposal- it was simply an idea included to gauge reaction from farmers and government leaders regarding what remains a hot item in rural Indiana- property taxes.

However, you might be surprised at how non-farm neighbors in subdivisions and rural areas might respond to this question and proposal. While such a group was not surveyed, anecdotal evidence raises questions. One schoolteacher living in a rural county- now sit down to read this- actually thought her property taxes weren't high enough! You read right- she would just a soon pay more in property tax.

Why? She reasons that if property tax doesn't cover costs, the money must come from somewhere. And if it comes from somewhere else, that might be income taxes that hit her in every paycheck. For her money, she would just as soon get it done in one lump sum through property tax.

Hoosiers are already paying for the switch that will remover several levies entirely from the property tax system. The sales tax rose 1% to 7% April 1. The rub many farmers are caught in and don't like is they don't see the relief this calendar year, even though goods they purchase and pay sales tax on are already higher. In fact, since the land value formula was unfrozen, base farmland value is calculated at an average of $1,140 dollars this year, up from $880 used for several years. From reports received here, that roughly 25% increase is translating into an increase of about that proportion in many areas for farmers owning bare land. While the rate should come into play, with the percent of increase in the formula assessed value not being the final rate of increase farmers should see, there appears to be some loose connection this year. Coincidence or not, many farmers are reporting unhealthy increases of 20 to 30% in their total property tax bills for payments due in '08 vs. payments payable in '07.

The anonymous school teacher actually saw a decrease in property taxes on her home for this year compared to last year. That single fact, increasing taxes on land vs. decreasing taxes due on homes, could be fueling the property tax debate once again in rural, farming areas.