Agricultural Property Taxes
Agricultural property owners are being taxed unfairly, required to carry ever-increasing unsustainable property tax burdens. Where school construction bonds are involved, agricultural landowners pay 10 times more than homeowners in the same taxing district.
With no relationship between the ability to pay and the amount of tax owed, the impact of the increased tax load on agricultural property taxpayers is further complicated by declining farm income.
Agricultural landowners who do not reside in the school district are required to pay for approved bonding without the opportunity to vote in the referendum to authorize the tax. This is taxation without representation
In 20 percent of Minnesota state school districts, 75 percent or more of the tax base is agricultural property. In over 30 percent of the state’s school districts, 50 percent or more of the tax base is agricultural property.
Continually increasing property taxes are not sustainable. 2001-2014 saw an 85.47 percent increase in property tax levies, and the average payments for farmers for real estate tax per acre jumped from $12.26 in 2005 to $31.02 in 2014, over a 150 percent increase.
Until structural changes are made to balance the lack of inequality of the current property tax system, offsetting a portion of the school debt burden related to agricultural property is necessary.
The short-term solution is found in the current proposed tax conference committee report, which includes a provision which uses the state’s general fund to offset one-half the present school district bond debt load attributed to agricultural property taxpayers. Using this approach will not have negative effects for school districts or other taxpayers.
Long-term attention is necessary to change the requirements of agricultural property taxpayers to shoulder the tax burden that is presently placed on their land. Funding local government services should be better aligned to match the sources of tax revenue and expenses. As an example, Farm Bureau policy opposes farmland be required to cover the costs for social services. Basing all property tax on the basis of a house, garage and one-acre (this is called Market Value) would bring about a greater level of equal responsibility for all taxpayers.
Along with greater fiscal responsibility through constraints of local spending, additional tax types should also be considered as methods for paying the expenses which are necessary.