Lt. Gov. Sue Ellspermann was in Howard County Tuesday, getting yet another earful on property taxes and tax caps as she continued her “Listen and Learn” tour of Indiana’s 92 counties.
Ellspermann met with local elected officials earlier in the day at Ivy Tech and with an invited group of farmers and civic leaders later in the day at Bryan and Susan Kirkpatrick’s farm near Greentown on what was billed as a mission to glean potential agenda items for the upcoming legislative session.
“I’d like to see farm property taxes addressed,” Bryan Kirkpatrick said, drawing nods from his fellow farmers. “They’ve gone up quite a bit in relation to gross receipts, and it has gotten to be a more significant cost, for us and for landlords as well.”
Ellspermann said there’s currently no proposal on the table addressing property taxes, but said the administration “remains open to looking at ways to add more stability into the property tax model.”
“We will continue to look at it, to make sure property taxes for farms are fair and appropriate,” she said.
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For elected officials, the property tax caps enshrined in the Indiana Constitution have set off a race to divide a now-limited source of revenue.
Finding a way to fund government with a cap on the main source of local revenue is a challenge, particularly with the state granting more and more tax exemptions and tax appeals getting harder to deny, Howard County Assessor Jamie Shepard said.
Then there are concerns that the tax burden isn’t equitably distributed.
Farm land is the only kind of real estate which has seen a steady increase in value, a growth almost unaffected by the recession, Shepard said.
In the past year, agricultural land accounted for 7.7 percent of the net assessed value in Howard County. A year ago, farm land was 6.9 percent of the total.
The fact farmers, who wield considerable political clout, have been shouldering an increased share of the overall property tax burden, could spur more activity in the Indiana General Assembly.
But giving tax breaks to farmers would push the burden elsewhere, unless new industry or increasing property values provide enough of a rising tide to lift all boats, so to speak.
For instance, the state’s 2006 property tax reform lowered property taxes across the board, but also resulted in a 17 percent increase in the state’s sales tax, and in a 77 percent increase in Howard County’s local income tax rate.
Another idea kicked around Tuesday was lowering or eliminating property taxes on the machinery used for production.
Last year, State Sen. Jim Buck, R-Kokomo, authored legislation to allow more depreciation on personal property, but Kokomo and Howard County officials expressed opposition to the legislation with city officials estimating it would result in a $13.5 million shift from industry onto other property taxpayers.
Shepard said farmers initially backed the idea, but cooled on it after calculations showed any savings would probably be canceled out by increased taxes on farm land.
