Proposed Tax Hike on Kansas Farmland Causes Backlash

Proposed Tax Hike on Kansas Farmland Causes Backlash

A suburban lawmaker's proposal would dramatically increase property taxes on Kansas agricultural land and has spawned a strong rural backlash and nagging fears that pieces of it will pop up in legislation to close a state budget shortfall.

Sen. Jeff Melcher, a Republican from the Kansas City suburb of Leawood, argues that agricultural land is valued for tax purposes so far below market values that it's unfair to other businesses and homeowners. He also contends the state is losing millions of dollars for public schools and local communities are being robbed of millions of dollars more for services.

"Because the farmers aren't paying, their neighbors are picking up the tab," Melcher said.

But farmers and agriculture groups see the eye-popping numbers for potential tax increases from the proposal, which would change how government appraisers determine the land's potential for income.

The Kansas Department of Revenue estimates the state would collect an additional $173 million in property taxes, while counties, school districts and local communities would take in an additional $717 million, a total annual increase on agricultural land of $890 million. Increases would vary county to county and by the type of land, and owners would see an average statewide property tax increase of 569 percent on each irrigated acre.

The chairmen of the House and Senate tax committees, not rural lawmakers themselves, are skeptical of the measure, and the Senate committee hasn't scheduled a hearing. But even introducing such a proposal would have been unthinkable in the past in such a rural state.

"I don't think the bill stands a chance in hell of passing, but just the fact they are trying shows that we have lost some of our standing within the state of Kansas in regards to the politics of Kansas," said Donn Teske, who farms 1,500 acres near Wheaton in northeast Kansas and serves as president of the Kansas Farmers Union.

Kansas Agriculture Secretary Jackie McClaskey wrote in a letter to the editor for various newspapers last week that Melcher's proposal would be "devastating" to agriculture and rural communities.

Johnson County Appraiser Paul Welcome said the change probably wouldn't much affect developers who claim an agricultural value on undeveloped parcels for tax purposes. But, he said, the change would be "huge" for the owner of a farm in a suburban area "still hanging on while you've got development going around it."

The GOP-dominated Legislature must close a projected budget deficit of nearly $600 million for the fiscal year beginning July 1.

The shortfall arose after lawmakers aggressively cut income taxes in 2012 and 2013 at Republican Gov. Sam Brownback's urging to stimulate the economy. One policy exempted 53,000 farmers from income taxes, along with the owners of 281,000 other businesses.

Revenue-raising proposals are proliferating. Brownback proposed increasing tobacco and alcohol taxes, and the Senate tax committee introduced a bill to eliminate a state sales tax exemption for farm machinery purchases, something that would cost farmers $73 million a year.

Kansas Farm Bureau lobbyist Ryan Flickner said his group worries that parts of Melcher's proposal will end up in a tax bill in late April or May, when lawmakers are trying to wrap up their business for the year

Melcher had the Senate budget committee sponsor his proposal, which exempts it from any legislative deadlines. And, even if his proposal doesn't get traction this year, he's promising to keep raising the issue.

"Anybody that owns a home out in rural Kansas or anybody that owns a business is shouldering the majority of the burden for funding government there," Melcher said.

How far do you think this proposal will go? Could your operation absorb these higher taxes? Give your opinion on the AgWeb discussion boards.

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Spell Check

3/2/2015 07:35 AM

  How much suffering will it take for KS citizens to learn their lesson. Its obviously a lot more, so why prolong the pain, just make all the destructive decisions now and let everything fall apart quickly.

Jackie Connet
Wichita, KS
2/27/2015 05:16 PM

  So...the big tax experiment fails, and the best idea is to overly burden the state's chief industry and take it down, too? Nice. The Golden Goose theory of government. Only here in KS.

Earnest Crist
El Reno, OK
2/27/2015 05:19 PM

  So rural vote for a Governor and legislators who say they want to eliminate the income tax but then you are shocked that when budgets get right the folks in the cities start looking at things like Ag sales tax exemptions and Ag use land evaluation?? I have news for you...they ( like many of you) want to keep their schools open, fund health care, keep the cops hired, fix up the roads and make sure the prisoners are locked up. You have to have money to do this and shocking as it may sound there are more folks in cities than there are on farms.... You have voted for these "small government, anti-income tax" yahoos for years careful what you ask for because you might get it. Drink up made sure the tea party was in power... I just hope that the brew they sold you tastes as sweet as the rhetoric you swallowed on Election Day.


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