It's all in the soil
Assessment based on productivity index
Sunday, October 23, 2005
GALESBURG - Bulletin 810 - If you are involved in agriculture or education funding, it's something that will soon begin to dominate your life. It represents the biggest change in farmland assessment in Illinois in almost three decades.There are 600 to 700 types of soil in the state. Each has to be tied to a productivity index in order to determine farmland assessments and, thus, how much farmers will pay in property taxes on the land. Unlike property taxes on houses, the selling price of farm land is not a factor for assessments.
Dwight Raab, an extension specialist with the Agricultural Economics Department at the University of Illinois, said soil is being reclassified because new technology has the potential to change the productivity of soil.
"Technology we use in farming poor soil types has been able to increase yields," Raab said.
Bulletin 810 compared to Circular 1156: "It's new information. It's better, it's more accurate. The soils were (reclassified). Maybe one responds better to technology than another," Raab said.
Such a scenario would lead to that soil having a higher PI, which could lead to higher taxes. If the land is less productive, farmers will see lower property tax bills, but rural school districts will receive less in tax money from an area that is a major source of funding for many Knox County schools.
A number of Knox County school superintendents are worried farmland values, capped at no more than a 10 percent annual decrease, will be allowed to drop more in Assessment Year 2006, when Bulletin 810 goes into effect, maybe as much of 14 percent.
Williamsfield District 210 Superintendent Rich Putnam said, "I wouldn't anticipate huge changes in the value of soil types in our area, but you never can tell. ... I can't remember the last time they changed the value of soil types and I can't remember the last time the full value was allowed in one year."
According to an 82-page booklet put out by the University of Illinois, soil productivity information now being used comes from 1970's Circular 1016, updated in 1978 in Circular 1156.
Raab said the worries of some school superintendents about the 10 percent cap is not strictly correct, but ... since reclassified soil may go from, for instance, one-half as productive compared to the best soil type to two-thirds, "That's some of what is not limited by the 10 percent move."
Raab said a farmer could see land assessments change by more than 10 percent - up or down - because "we might find out your county assessor or township assessor may have misidentified your soil type."
Raab said he has talked to farmers who said the assessed valuation of their land has increased by more than 10 percent.
"What happened was their soils were misidentified," Raab said. "The good part is you have been paying lower tax bills for years and years."
The potential problems are basic; dealing with them is not.
"Some of these rural school districts are at their limits of their levies," Raab said, "and the assessed valuation is going down."
Administrators of schools relying heavily on taxes paid on farm land - especially schools now taxing at their maximum allowable level - are wary. If Bulletin 810 has a significant adverse effect, the only options may be to go to the voters and ask for a tax rate increase, or to look at consolidation.
Recalling the effort by the state to mandate consolidation in the 1980s, ROWVA Superintendent Gary Buckingham speculated, "maybe that's an ulterior motive the state has. You never know."
