Some Leflore County farmers say tax increases over the last several years coupled with low commodity prices have put them under significant financial pressure.
“If commodity prices don’t go up and something else doesn’t come down, it’s going to be a sad situation,” said Wayne Bush.
In a letter to the editor published last week, former Leflore County resident Jim McMinn said taxes on agricultural land are on pace to exceed rent in the next 15 years.
“What value is land to a landowner if the taxes are greater than any revenue that they can generate from renting it?”said McMinn.
“It’s not quite that high yet, but it’s getting there,” said Bush’s son, Chris, adding that low commodity prices were compounding his woes.
Leflore County Tax Assessor Leroy Ware said the issue of taxes exceeding rents is a “legitimate concern” but ultimately one that he has no control over.
“The tax assessors really have no discretion in terms of saying, ‘OK, it’s too high, it’s too low, it’s whatever,’” he said.
In Mississippi, agricultural tax bills are based on the appraised value of a parcel, the assessment rate set by state law and the county millage rate.
The agricultural use value of a parcel — based on expected future returns from agricultural commodities — is determined by the suitability of its soil for the production of agricultural commodities.
These values are enforced by the state Department of Revenue but are determined by agricultural economists at Mississippi State University.
Because future returns cannot be predicted, an average return over a three-year period stands in for expected future returns. However, there is a gap between the time those data are generated and the time they are incorporated into the three-year moving average.
Economic outcomes from 2015 will not be incorporated into agricultural use values until 2017.
Ware said that because of this lag, even bad years for farmers can be accompanied by increasing land taxes, the costs of which are often passed on to farmers by landowners.
By state law, from one year to the next, the assessed agricultural use value of a parcel cannot change by more than 10 percent in either direction.
“The last five or six years, they’ve gone up that 10 percent,” said Ware, adding that when increases in the millage rate are taken into account, landowners actually face a 12 to 15 percent increase each year.
“It’s the biggest increase that I can remember,” said Chris Bush.
McMinn described the 10 percent cap as arbitrary and excessive and said he was “not terribly impressed” by the methodology used by MSU to calculate agricultural use values.
McMinn points to agricultural use values supplied by the U.S. Department of Agriculture for the state of Mississippi that supply an annual increase of just under 5 percent as a more reasonable barometer of values.
Ware said that is a matter for the state, adding that presently agricultural use value is “whatever the agricultural economists up in MSU say it is.”
• Contact Nick Rogers at 581-7235 or nrogers@gwcommonwealth.com.
