In Other Words: Throughout history, S.D. has adapted to changing timesTwelve years ago, most of the buildings on our farm burned down — intentionally. Over the years, my father had amassed quite an array of chicken coops, hog houses, and storage sheds filled with junk, or as he put it, “antiques.” In the summer of 1997, my brother Tim and I were planning to construct a new farm shop and those ramshackle buildings sat in an ideal location.
By: Bill Even, Submitted columnist
Twelve years ago, most of the buildings on our farm burned down — intentionally. Over the years, my father had amassed quite an array of chicken coops, hog houses, and storage sheds filled with junk, or as he put it, “antiques.” In the summer of 1997, my brother Tim and I were planning to construct a new farm shop and those ramshackle buildings sat in an ideal location.
We spent several weeks cleaning out those dilapidated structures and after numerous trips to the scrap yard, we bulldozed those old buildings into a hole and lit them on fire. This marked a major transformation for our farm, but it set the stage for a fundamental change in our operation.
On July 1, the South Dakota Agricultural Property Tax assessments also underwent a fundamental change. Instead of the old assessment method based on market sale price, agricultural property will now be assessed on its productivity value.
For cropland, the new assessment is based on countywide acres planted, countywide production and statewide crop prices. Non-cropland assessments for range and pasture acres will use a cash rent formula. These components will be entered into a database with the most recent eight years of information. The highest and lowest years will be discarded and the remaining six years of data will be averaged to from the baseline for property valuation.
County assessors will retain their existing authority to make localized adjustments to account for differences in climate, topography, soil surveys and other factors.
This change is a positive step forward for agricultural landowners.
Under the old system, an isolated, unusually high sale price would increase the property valuation for adjacent landowners. Previous attempts to control these unreasonable impacts resulted in patchwork laws and wide disparities in agricultural land values. Many producers would have seen much higher taxes because the caps limiting the increases were set to expire.
The revised system eliminated skewed assessments and provides a more equitable model. This critical change is necessary because family farmers should not be forced to sell their land due to a property tax policy influenced by nonagriculture price pressure.
With this change, many landowners will see adjustments in their property valuation — both positive and negative. However, the new system limits the valuation assessment to no more than 10 percent increase (or decrease) per year.
Last year, agricultural landowners paid over $219 million in property taxes that helped support schools, counties and townships. Under the new system, these local entities will continue to receive the same revenue and remain subject to state property tax caps.
Throughout our history, South Dakotans have adapted to changing times in order to better provide for their needs. Whether adjusting to a new farm business situation or modifications to the property tax assessment, while change can be difficult, it is often for the better.
“Change is inevitable … Adaption and survival are optional.”
Bill Even is secretary of the state Department of Agriculture.
In Other Words features opinions from local and other contributors who have areas of special interest or expertise. Material shouldn’t exceed 600 words and can be sent to: The Daily Republic, 120 S. Lawler, Mitchell, S.D., 57301. Not all submitted material will be used.