Kansas farmers have faced a struggle for the adult lifetime of many. The demand of the nation rests on the ability of farmers to create the natural grains and food product that we all rely on to eat. Small farms have given way to larger farms in an effort to supply the market with a price of goods that it can accept.
Part of that traditionally has been a state lead tax policy which lowers the tax value of production agriculture land. Now, a Republican Senator is calling it out as just welfare under another name, and he plans to end it. This move would raise taxes for farmers as high as 1000%, figures some analysts.
http://www.salina.com/...
Leawood senator who introduced legislation says farmers 'just don't realize how good they've had it for many years'
Sen. Jeff Melcher, R-Leawood, who introduced the bill last week, said Sunday that the change would value agriculture property the same as other property. The current statute “is designed to artificially produce extraordinarily low farmland values,” he said.
With such potentially massive increases afoot, the question is: what implications would their be for Kansas farmers?
In order to understand how the current rates are handled, you have to understand that as a nation the current practice of taxing agriculture land is THE standard.
http://agview.net/...
Senate Bill 178 which has been introduced in the Kansas legislature, seeks to amend the long-standing law for appraisal of agricultural land. Kansas, like 43 other states, has a time-tested, constitutionally-mandated method of taxing agricultural land based upon the income a landowner can expect to produce.
Kansas, along with 42 other states traditionally taxes agriculture land on the basis of expected output rather than the variable value of property as assessed. There are some reasons for this - the most obvious being that unlike a home or similar property, farm land which doesn't produce has low value. And if the market itself drives product value down, than a farmer may find themselves facing bringing in a crop at breakeven or in some cases a loss.
From the Kansas Farm Bureau:
http://agview.net/...
Kansas farmers and ranchers oppose SB 178. This bill impairs a stable, nationally-recognized system to calculate and tax the income potential of land. Instead it proposes the use of volatile, artificial cash rental rates, which would upend the predictable revenue stream upon which Kansas counties, school districts and state government depend to fund operations.”
“SB 178 is a tax increase, is not equitable, and would be detrimental to Kansas agriculture and small businesses,” the Montgomery County farmer said. “Agriculture is the number-one driver of this state’s economy and provides a solid foundation that has softened many of the impacts of a weak national economy over the last several years. KFB opposes the bill and will work to defeat attempts to erode agriculture’s vital role in the Kansas economy.”
Let's face it though - for many of us who aren't farmers, the real question is: how would making these farmers pay significantly more impact us?
http://www.salina.com/...
Land in northeast Kansas that often enjoys 40 inches of rainfall a year is worth from $5,000 to $7,000 an acre, Shellenberger said, and dry land in western Kansas is worth $2,200 an acre. But the land in both areas would feel the same tax hike from $6.02 an acre to $30.57 an acre, he said, quoting figures from Nick Jordan, Kansas Secretary of Revenue.
Kansas State University Farm Management data from 2008 through 2012 showed that the net return on dryland wheat in northwest Kansas was $31 an acre, according to Ehmke.
“This bill would eliminate any profit in growing wheat,” he said.
In other words: grain production could not, at current market rates satisfy the cost increases due to a farm, putting many of them either out of the grain business or out of business altogether.
The bill as it is currently configured is viewed as "Unlikely to pass" say Republicans in Topeka, but Kansas Democrats would be well served to make some noise on this issue. Senator Melcher hasn't tried this once - he's tried this repeatedly. In an editorial for the Hutchinson Post, Jason Probst noted that:
http://www.hutchnews.com/...
Rural Kansas now may have buyer’s remorse, but this is the government with which we are stuck. We freely re-elected a governor blindly dedicated to an income-tax free Kansas, and we gave him a Legislature largely without courage, whose members seemingly are more interested in their political well-being than in what is best for Kansas.
Whether it passes or not the fact that Republicans are the ones advancing the wild tax increases aimed at beer, cigarettes and now farm land speaks to the interest of the Republican Party for everyone from the average Kansan to the agriculture tradition. After all, if keeping Kansas competitive with other states truly was a high value you would think that legislation that places Kansas at an agricultural disadvantage against 42 other states would stand out as a bad idea.