Missouri legislature blocks tax increase for some farmers

Thursday, February 18, 2010 | 8:55 p.m. CST

JEFFERSON CITY — Missouri lawmakers rejected a tax plan Thursday that would have increased property taxes for the state's best farms and lowered taxes on the worst.

Property taxes for Missouri farms are based on the land's "productive value," which is set by considering how much money can be earned through the land by agriculture. In December, the State Tax Commission voted to increase the productive values for higher quality land, cut them for lesser land and keep them the same for the worst.

But farm groups, the state Department of Agriculture and many rural lawmakers sharply criticized the commission's recommendations. Critics focused on the portion that increases taxes and warned of dire consequences for the state's economy.

The tax changes would have taken effect in 2011 if lawmakers had not passed a resolution disapproving of the Tax Commission's decision. The House voted to block the tax changes 143-11 on Thursday, and the Senate passed the resolution 30-3 last month.

Rep. Brian Munzlinger, who represents a rural district in northeastern Missouri, said farm incomes have increased because of investments in agricultural methods, not because farm land is more productive.

"It's just not the time to be increasing taxes," said Munzlinger, R-Williamstown.

Missouri's farms are divided into eight groups based on land quality, with the best farms in Grade 1 and the worst in Grade 8. The Tax Commission increased the value for farms in the four best categories, which generally are cropland. It lowered values for the next three categories, which include pastures, and kept the worst category the same.

The Missouri Farm Bureau, which has been critical of the tax changes, estimated that overall the productive value for farms would have increased by more than 11 percent.

"This is a much needed victory for Missouri farmers at a time when they face many difficult economic challenges," Farm Bureau President Charles Kruse said.

According to state tax records, more than 60 percent of Missouri farmland falls in the categories that would have received tax cuts. In most counties, the productive values for the bulk of the farms also would have been decreased.

For example, all the farmland in Carter, Crawford, Douglas, Taney, Texas and Washington counties would have received a tax cut or faced no changes.

Counties with the largest concentrations of land that faced tax increases are mainly in far northwestern and southeastern Missouri. More than 80 percent of the land in Atchison, Dunklin, Mississippi, New Madrid, Nodaway, Pemiscot and Stoddard counties faced higher property taxes.

Under the proposed tax plan, the productivity value for best farms would have been raised from $985 per acre to $1,270. That covers flat properties with deep, ideal soils. The largest decrease would have been from $195 per acre to $147 for Grade 5 farms, which can be steep with serious drainage problems.

Missouri agricultural taxes are calculated by multiplying the productive value by 12 percent to come up with an assessed value, then multiplying that by the local tax rate.

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