BENTON, Ill. — Farmland owners throughout Illinois will again face a bit of sticker shock when they receive their latest property tax notices – the second wave of bills under a new assessment change designed to equalize what had become “unfair” tax treatment for different types of soil.

 

In essence, and for years since state officials capped assessment changes to no more than 10 percent in 1986, owners of  the most productive farmland in Illinoisessentially saw the taxable value of their acres increase at a disproportionate rate than lower-producing farmland.

 

To correct the discrepancy, state lawmakers two years ago approved changes to the way taxable values are applied to farmland that most tax experts said would eventually make the system fairer, no matter how productive a soil type is rated.

 

“Eventually” is the key word, because it is expected to take about 10-15 years to eliminate the disproportionate effect of the old law, with lower-producing soils seeing greater increases in assessed value, said Brenda Matherly, assistant director of local government for the Illinois Farm Bureau (IFB).

 

“I think many farmers will have questions after opening that tax bill this summer for 2017 and a continued concern on these increases that we’re seeing,” Matherly said.

 

The IFB supported the changes in large part because other possible remedies, even some through legal action, could have had a greater impact on farmland owners, said Franklin County Commissioner Ron Ellis. Generally, in Illinois the least productive soils are located in the southern one-third of the state, where the higher assessment changes have taken place since last year’s first wave.

 

While most landowners in Franklin County saw their tax bills increase by about 30 percent, this year those same bills could go up as much as 70 percent, Ellis said. “It certainly isn’t happening at the best of times, with (commodity) prices being and all.”

 

Assessed value of land is one of two key variables in determining annual tax bills; the other key factor is the amount of money local governments request each year. Farmland is assessed backed on its productivity index (PI). To determine the PI, state officials also factor in the land’s gross income and production costs during a rolling five-year period, along with interest rates and other factors.

 

Soil is assigned a PI from 80-130. Five years ago, a soil with an 82 PI had a certified assessed value of $13.87 per acre. The median PI for the state’s soils remains 111, and it had a certified value of $184.83. The best-producing soil had a certified value of $587.

 

New PIs released by the state’s Farmland Assessment Technical Advisory Board last year and for this year show steep increases for lower PI soils: for soil with an 82 index, the assessed value last year was $76.50 per acre and is $102.96 this year, a 642 percent increase since 2013; for the median index of 111, the assessed value was $264.56 last year and $291.02 this year, a 57 percent increase; and for soil with a 130 index, the assessed value was $707.18 last year and is $733.64 this year, a 25 percent increase. To find values for all soil types this year, go to www.revenue.state.il.us/localgovernment

 

Some counties already have begun mailing tax bills, with most expected to be released before the end of May.