Lower property taxes for farmers goal of bill approved by ag committee

When farmers sell crops for a good price, the value of their land goes up, raising their property taxes. But when commodity prices fall, as they have in recent years, those taxes don’t come back down as quickly, and farmers still pay more even though they’re making less.

A bill to address that problem and, potentially, lead to a change in the way agricultural property is valued, was approved by the House Agriculture Policy Committee Wednesday.

Rep. Ben Lien

Sponsored by Rep. Ben Lien (DFL-Moorhead), HF200 would appropriate $100,000 to study the possibility of valuing agricultural land based on its production value.

The bill now moves to the House Property Tax and Local Government Finance Division. Its companion, SF111, is sponsored by Sen. Kent Eken (DFL-Twin Valley) and awaits action by the Senate Agriculture, Rural Development and Housing Policy Committee.

Lien said many farmers “are struggling with property taxes” as property values remain high despite falling prices for their crops over the last several years.

Thom Petersen, government relations director for the Minnesota Farmer’s Union, testified in support of the bill, telling the committee farmers are having a difficult time paying those higher taxes and believe the current system reacts too slowly when their land values change. 

HF200 would require the Agriculture and Revenue departments to complete a joint study to determine, among other things, if property taxes based on production value would work, and the impacts this new system would have. Those agencies would involve farmers, assessors and other interested groups in the study, which would need to be completed by Feb. 1, 2019.

However, Rep. Tim Miller (R-Prinsburg) warned Lien the bill faces challenges ahead as questions remained unanswered about the impact moving to this different system would have on other taxpayers.

Rep. Paul Anderson (R-Starbuck) said he agreed with trying to lower the property taxes farmers pay, but also voiced concerns about a potential shift in the tax burden.

“If you lower one, somebody else has to pick up the difference,” he said.

Petersen said studying the issue was a good idea, but acknowledged how difficult arriving at a final solution would likely be.

“This is a big ship to turn,” Petersen said.