Ag Productivity Tax Risks Revolt

...but GOP Sponsor Opposes Further Study

Remember a couple weeks ago when I asked our District 8 State Senate candidates about the possible farm revolt over the new ag productivity tax (also known as income tax done bass-ackwards)?

Bob Mercer reports in the Pierre Capital Journal on some of the reasons this new tax formula may induce farmers to bring their pitchforks to Pierre. Assessed values on crop land could go up 40% to 90% by 2018. The new tax law limits increases and decreases to 10% a year through 2017, but come 2018, counties could impose much higher increases to catch up with costs, a possibility Mercer says could cause a backlash among landowners. The ag productivity tax formula also assumes that landowners get 35% of the income from cropland they lease out, a figure several members of the legislative task force studying the tax say is unrealistically high.

You know, legislators, instead of guessing how much farmers might make on their land, wouldn't it be easier to simply tax them on the amount they actually make each year?

Senator Jim Peterson (D-4/Revillo) says that before we get our bibbers in a bunch, we need to compare the potential assessment increases with the valuations that would have happened under the old system. I hear from a neighbor that some farm land just east of Madison sold this fall for $6000 an acre. At prices like that, farmers might come out ahead on a tax system based on what the land actually produces rather than the speculative fancies of wealthy city dwellers.

The legislative task force that discussed the ag productivity tax Monday got the state Revenue Department to agree to gather more data on the landowner lease-income percentage to see if the formula needs tweaking. Interestingly, the prime sponsor of the ag productivity tax, Senator Larry Rhoden (R-29/Union Center), argued against any further study:

The task force’s chairman, Sen. Larry Rhoden, R-Union Center, argued against collecting the additional data at this time. He said it’s better to let the system start to work.

Rhoden further warned that the data could merely fuel the arguments of opponents who fought against the new system when it was approved in the 2008 and 2009 sessions of the Legislature [Bob Mercer, "Tax Boost Likely on Ag Land," Pierre Capital Journal, 2010.11.09].

Don't study it, because data might support opponents' arguments? If that's Senator Rhoden's attitude toward studying problems, we should be alarmed about the direction the Legislature will take this year.

If the ag productivity tax is to be fair, it needs to be based on every bit of data we can collect. For the prime sponsor of the tax to advocate closing our eyes to available information puts landowners and taxpayers in danger of being fleeced by a badly designed tax.

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Update 2010.11.12 16:42 CST: Moody County neighbor and rural taxpayer John Walker suffers a rare bout of Madville Times concurrence. Mr. Walker is resting comfortably and is expected to recover fully... in time to lead a pitchfork parade to Pierre in January.