On March 13 the Indiana Senate gave final approval to legislation that would protect Indiana farmers and agriculture companies by more accurately reflecting farmland values.
Beginning with taxes payable in 2011, Senate Bill 396 would change the calculation by which farmland assessments are determined. Under the proposal, the base rate formula for farmland assessments would be done on an adjusted six year average with the highest value eliminated.
The Indiana Department of Local Government and Finance currently determines farmland assessed value based on a six-year rolling average. The formula takes into account information on land rents, crop yields and prices, and interest rates. Farmland values are recalculated each year as part of the trending process.
For example, the base value per acre of farmland is $1,250 for taxes payable in 2010. The value is currently estimated to increase to $1,400 for 2011, $1,700 for 2012, and $1,810 for 2013. Under this proposal, the base rate would be $1,290 for 2011, $1,500 for 2012, and $1,620 for 2013.
A few interesting statistics on farmland in Indiana
16% — Percentage of Indiana’s workforce connected to agriculture. (1)
$25 billion – Annual contribution to the state’s economy from Indiana’s farm, food and forestry products. (1)
64% — Percentage of total land in Indiana that is farmland. (2)
14.7 million acres – Amount of farmland in Indiana. (2)
242 acres – Average size of an Indiana farm, but a majority of farms are less than 100 acres in size. (2)
52,553 – Number of family or individually-owned farms in Indiana, representing 86.2% of the total numbers of Indiana farms. (2)
Top 5 agriculture commodities in 2008 (2)
1. Corn
2. Soybeans
3. Hogs
4. Dairy products
5. Chicken eggs
SB 396 was approved earlier this month by the House, so it will now be sent to the governor for his consideration.
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