Farmers may see large tax increases under proposal

SEMO News Service

Many farmers may see substantial tax increases on their land if a proposal by the Missouri State Tax Commission stands.

The commission last week agreed to change the tax rate for farmland in different categories, based on a study by the University of Missouri-Columbia of a 15-year cycle of farm income. The assessment is conducted every two years, though no changes were instituted this year.

Under the proposal, land suitable for cultivation would see taxes increase by as much as 29 percent, while taxes would decrease by up to 25 percent for land where crops generally aren't grown. The increase would benefit entities such as schools.

Commission chairman Bruce Davis said that although he realizes the recession has affected all sectors of the economy, including farmers, the proposal wouldn't go into effect until 2011, if approved by the Missouri Legislature.

"People need to remember that it would go into effect in 2011 and that's two years away," Davis said. "Those who oppose it use the argument that we're in tough economic times, and I agree.

"But they're not looking into the future," he said. "They're looking at the situation now."

However, Dr. Jon Hagler, director of the Missouri Department of Agriculture, thinks the legislature should think twice about approving the proposal.

"We continue to believe that this is the wrong time to increase farm productivity values," Hagler said in a written statement. "The current recession has greatly affected Missouri's farm families.

"Volatile market prices and a severe lack of credit for refinancing have only made matters worse. Increases in land assessments would be detrimental to farm families and Missouri's overall economy."

Productivity values ranged from Grade 1 land, categorized as prime agricultural land, to Grade 7 land, where the soils are generally unsuited for cultivation and may have severe limitations for grazing and forestry. Under the proposal, Grade 1 land would increase from its current rate of $985 an acre to $1,270 an acre. Three other classes of land would also have rate increases, while three classes would see their rate decrease. Grade 5 farmland would see the biggest drop, decreasing from $195 an acre to $147 under the proposal.

State Sen. Jason Crowell plans to introduce a Senate Concurrent Resolution to prevent the proposal from becoming law.

"We need to be finding ways to lower taxes for our farmers, not increase the costs of owning a farm," said Crowell, R-Cape Girardeau. "Farmers are the backbone of Missouri's economy and it is the state's job to provide every avenue possible for farmers to succeed, not to create roadblocks."

The Missouri Farm Bureau is among those that have asked legislators like Crowell to fight the proposal.

"As we stated to the State Tax Commission, many Missouri farm and ranch families are facing financial strain like they have never seen. Extreme market volatility combined with record production expenses, unusually wet weather and weak demand have left many producers struggling to manage debt and cash flow," said Charles Kruse, president of Missouri Farm Bureau. "Missouri farmers are carrying some of the highest debt load in the nation, and clearly they cannot be expected to shoulder a tax increase."

John Lorberg, whose family farms nearly 1,000 acres in the Gordonville area, said the proposal would affect many farmers like himself.

"There's no question if they raise taxes it will cost many of us more money," Lorberg said.

Larry Strobel, who has a 4,000-acre farm in Bell City, Mo., is hopeful legislators will oppose the proposal.

"With the economy the way it is, it's not good," Strobel said.