STATEHOUSE (Feb. 2, 2010) - Senate lawmakers today approved a measure aimed at stabilizing Indiana's agricultural property assessments, a process farmers believe is currently unfair, according to State Sen. Randy Head (R-Logansport).
Senate lawmakers voted 50-0 in support of Senate Bill 396 sending the measure to the House of Representatives for further consideration.
Head, co-author of the bill, said state figures show farmers are experiencing unanticipated "peaks and valleys" in farmland assessments based on an experimental formula crafted in 2006.
Economists attribute fluctuations in farm values in-part to speculation about alternative energy sources like ethanol, bio-diesel, bio-mass and wind as well as economic corrections due to the national recession, food and energy markets.
A statewide per-acre value for agricultural land is set each year by the Indiana Department of Local Government Finance (DLGF). Currently, DLGF uses an adjusted six-year average and takes into account net-income and cash-rent models, according to Head.
Senate Bill 396, supported by the Indiana Farm Bureau, would use an adjusted rolling average that eliminates the highest and lowest values over a six-year period. Known by economists as the "Olympic Average" technique in which outlier scores are disqualified, the model would give farmers and local governments more stable agricultural property assessments with slower growth and slower declines, but perhaps be more representative of production value.
Officials of the U.S. Department of Agriculture's Farm Services Agency routinely use the Olympic Average technique in determining agri-business programs nationwide, including here in Indiana.
"Lawmakers have worked together to reduce local government's reliance on property taxes and permanently protect all classes of taxpayers from future increases," Head said. "This legislation helps give stability to our farmers who feel their assessments do not reflect true value."
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