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home : news : news Wednesday, November 25, 2015

4/6/2013 Email this articlePrint this article 
Clinton County ag land values increase 54 percent

By Jeremy Huss
Staff writer

Owners of agricultural property in Clinton County will see a 54 percent increase in assessed land values in 2013 that will impact property tax bills due in the fall of 2014 and spring of 2015, according to county assessor Rollie Ehm.

The increase is the result of high corn and bean prices in 2010 and 2011 that affect the formula used to determine agricultural property values.

By law, counties must re-value property every two years if there is a change in market value, Ehm explained.

Agricultural land and building assessments are calculated using a five-year farm income formula. The 2011 farm assessments were based on the 2005-2009 crop years, while the 2013 assessment is based on the 2007-2011 crop years, which saw a substantial increase in farm incomes.

The average price of corn in Iowa in 2005 and 2006, the two years removed from the formula, was $1.95 and $3.09 per bushel.

The average price of corn in 2010 and 2011, the two years added to the formula, was $5.46 and $6.35 per bushel, and similar increases were seen in soybean prices.

"Commodity prices basically doubled," Ehm said.

In addition, poor yields seen in 2005 further depressed farm income compared to the 2010 and 2011 crop years.

The increase in assessed farmland values will impact tax bills due in September 2014 and March 2015, but the increase will be lower than 54 percent due to the rollback factor calculated by the Iowa Department of Revenue.

The rollback is designed to limit growth in property values based on a statewide average. The 2012 rollback factor was 60 percent, and it is estimated the 2013 rollback factor for ag land and buildings will be around 45 percent.

As a result, the taxable value for the 2013 assessment year will increase approximately 18 percent, Ehm said.

"The rollback is doing what it's intended, to reduce the impact on the taxable value with commodity price shifts," he stated.

"When you work on next year's budget, you can look at the total assessed value and adjust the (tax) rate to further minimize the impact," Ehm told the Clinton County Board of Supervisors April 1.

"This is a shift from other property types to ag land?" supervisor Brian Schmidt asked.

Ehm answered affirmatively, noting the reverse happened in 2007, when some of the tax burden shifted from ag land to residential property.

"They use the five-year formula to try to avoid those big swings, but we've got a 54 percent swing even with that," Ehm said.

"There's going to be some tax shift from the residential to the agricultural sector," Ehm said.

Ehm said the commercial tax rate has been flat for four years, thanks in part to an average 4 percent growth in residential and agricultural property values.

Residential values increase in DeWitt

Residential property owners in DeWitt also will see an increase in the assessed value of their homes of approximately 9 percent.

Based on nearly 100 residential property sales in 2012, the assessed values of homes averaged 90 percent of the market value.

According to state guidelines, assessed values should be within 95-105 percent of the market value, resulting in a 9 percent increase in values, Ehm said.

Ehm said residential property values increased in DeWitt but not in other areas of Clinton County.

The rollback factor for residential property in 2012 was 53 percent, but not enough data is yet available to estimate the 2013 residential rollback.

If there is a change in the assessed value, property owners will receive a notice from the county assessor's office in early April. Individuals with questions can contact the assessor's office at (563) 244-0569.

Property owners may appeal the change in assessment April 16-May 5.

Ehm said he doesn't expect individual appeals to have much chance of success since the increase in values impacts property owners across the board.

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