A bill engineered by a group of Delta farmers that county officials feared would result in heavy reductions in tax revenue died in conference committee Friday as the Mississippi Legislature ended its 2019 session.
House Bill 1456 was written by the Mississippi Property Tax Alliance (MPTA), a small but influential organization of farmers and agriculture land owners in Leflore, Sunflower and Holmes counties.
The bill would have changed the formula the state uses in determining the value of farmland for tax purposes. Unlike residential and commercial property, where the value is based on what the property would sell for on the open market, the value of farmland for tax purposes takes into consideration soil classes and geographic regions, and a three-year average of net income according to average yields, market prices for commodities grown, and the cost of production.
MPTA complains that the formula, developed by the Mississippi State University agriculture economics department, results in huge swings in farmland tax bills from year to year. MPTA proposed a 10-year average to smooth things out while increasing the capitalization rate.
But estimates done by the Mississippi Department of Revenue found the impact of HB1456 would have gone beyond stabilizing the situation and instead would have resulted in a reduction of 16 percent to 20 percent in tax dollars received by the county from farmland.
MPTA pointed out this reduction would be phased in over four to five years, because of an MPTA-backed bill passed in 2016 that caps increases or decreases at 4 percent per year, giving county officials time to figure out how to cut their budgets.
The bill sailed through the House without opposition. The Senate passed an amended version with only seven votes against it. But since the measures differed, the bills were sent to a conference committee to come up with an acceptable compromise. After county officials began voicing their concerns about the bill causing reductions in tax dollars, it failed to come out of committee and was dead for the year.
Leflore County Tax Assessor Leroy Ware, who worked with other county assessors to rally opposition to the measure, said, “I think this will give us more time to have a discussion, particularly with local farmers, on farm values and assessments.” Ware said he understands farmers’ concerns and hopes discussions can lead to changes that would stabilize taxes on farmland and provide a more accurate value.
Bob Morgan, an MPTA member and trust officer and farm manager with Regions Bank, said he expected this year’s loss would lead to a new look at the problem and possible solutions.
“We still want to pursue a review of the formulas and the whole tax procedure,” Morgan said.
Morgan foresees a group of MPTA members, professors from the MSU agriculture economics department and representatives of the Delta Farm Bureau coming together to look at the formula used to determine the value of farmland when computing taxes.
“We continue to look at different ways to approach this,” he said. “I think it’s a complicated way to come up with farm values for tax purposes. There’s got to be a better way.”
Ware agreed. Although he said, “It’s really the best for everyone,” he added he would like to take part in a discussion toward a fairer way to value farmland and treat farmers.
Besides Morgan, MPTA members include Jim Tackett, owner of Heartland Catfish and a farmer; John Bush, Clint Dunn, David Grossman and Harry O’Neal.
•Contact Gavin Maliska at 581-7235 or firstname.lastname@example.org.