money down

For the first time in 20 years, Missouri agricultural productivity values have been raised by the Missouri State Tax Commission, meaning assessed valuation of farm ground in Scotland County has gone up just in time for tax season.

The productivity values, which had not been changed since 1995, raised from $55 for the top ground, agricultural soil grade #1, to just $1 for lowest valued, #8 grade ground.

Scotland County Assessor Jim Ward said all of this county’s farm ground is rated in grades 3 through 7.

River bottom ground, which mostly ranks in the #3 grade, saw productivity values raised from $615 to $645 an acre. The #4 grade ground will increase from $385 to $405, while #5 grade increased from $195 to $205. Grade #6 increased from $150 to $158 and #7 ground went up from $75 to $79.

The state tax commission proposed a study in 2013, which was completed, allowing the Missouri General Assembly an opportunity to review the proposed rates in 2014. Lawmakers elected not to reject the proposal, allowing the new rates to go into effect January 1, 2015.

State statute dictates that agricultural and horticultural properties be assessed at 12% of true value, compared to 19% for real estate and 32% for commercial. The assessor determines the market value of the property, every other year for real estate, and every year for personal property. The later reflects a 33% assessed valuation for vehicles, boats, etc, compared to just 12% for farm equipment and livestock and 0.5% for grain.

The tax commission explains that “an assessor is bound by laws and rules designed to assure assessments are as uniform as possible. Once an assessor determines the total value of a taxpayer’s taxable real and personal property, he/she calculates the portion that is assessed value by multiplying the total value by the percentages set by law for each type of property. Tax rates set by local governments are then multiplied by the assessed value. That figure is then divided by 100. The result of this calculation is the amount of tax levied, and owed, on the property.”

Ward indicated that the productivity value hikes will mean an increase of $1.79 per acre of assessed valuation for grade #3 ground. Grade #4 will increase $1.19 acre, with a $0.59 hike for grade #5, $0.47 for grade #6; and $0.23 an acre for grade #7.

With more than $15 million of the county’s $60.6 million in locally assessed valuation in 2014 coming from agricultural property, the average of roughly 5% productivity values will result in an estimated $750,000 of the county’s nearly $4 million increase in assessed valuation from 2014 ($60,611,927) to the current level of $64,611,400.

That value won’t necessarily carry over to the county government coffers. As a matter of fact the changes will basically be revenue neutral, as the county is governed by statute, limiting revenue increases solely to assessed valuation increases created by new construction.

The increase in farm ground assessed valuation along with other improvements brought the total ag assessed valuation for the county to $16,006,730 according to Scotland County Clerk Batina Dodge.

Because the majority of that was due to the assessment changes, and not due to new construction, the county was forced to roll back its tax levy rates from 2014 to 2015.

Dodge explained that state statues prevent counties from receiving revenue windfalls by hiking assessed valuations of existing properties, basically eliminating the threat of cash-starved governments from hiking assessed valuations simply to generate more revenue.

The county’s levy dropped from $0.04954 to $0.4859 in 2015 while the road and bridge levy dropped from $0.3469 to $0.03403 and the special road and bridge levy decreased from $0.3199 to $0.3138. Levy rates also declined for the hospital, health department, ambulance, library and nursing home districts in 2015 as well as Scotland County R-I schools. Overall the levy rate dropped nearly a dime, from $5.9995 to $5.9039 for Scotland County residents of the SCR-I school district.