INDIANAPOLIS – The chief budget architect for the Indiana House of Representatives outlined property tax concerns Wednesday for the next legislative session, focusing on school referendums and the use of excess levy appeals.
Other topics included: remonstrance petitions, the maximum levy growth quotient formula, and debt thresholds. Rep. Jeff Thompson, the chair of the fiscal-minded Ways and Means Committee, attempted to address these issues during the 2023 session but couldn’t agree with senators.
“I’m working toward simplicity,” Thompson said after his presentation before the State and Local Tax Review Task Force. “I don’t think we can solve it all in a single session. It is so massive that you must take a series of steps.”
Thompson warned, “We’re going to have a significant increase in the assessed value of farm ground.”
The Department of Local Government Finance calculates a rolling average using six years of capitalized net operating income and cash rent to determine the agricultural base rate for a given assessment year. The highest value of the six is dropped from the formula, and the remaining five years are averaged to determine a base rate.
For 2024, the base rate was determined to be $2,280 per acre, $380 per acre higher than for the 2023 assessment year. An increase in assessed value doesn’t automatically mean an increase in a farmer’s property tax bill but it can.
Thompson said he estimates that the base rate for agricultural land could soon jump to $3,100 because of the nature of the rolling average.
He also examined the last three years of growth in excess levy appeals. Indiana communities can seek property tax levies beyond traditional caps when property values increase faster than the state average.
A boom in assessed values during the COVID-19 pandemic drove up maximum levy appeals as local government units sought to pay for schools, fire protection, and more. But while the number of appeals didn’t change much between 2022 and 2023, Thompson noted that the amount approved nearly quadrupled.
Read the whole Whitney Downard story for the Indiana Capital Chronicle, here.
