Topeka — Farmers and ranchers in Kansas are likely to find troubling news in the mailbox over the next few weeks in the form of a notice from the county appraiser.
The notices will tell many of them that the value of their land has jumped. The average increase statewide is 7.5 percent, and that's not good news when prices for agricultural commodities are stagnant.
The one-two punch of higher taxes and weak prices has state senators from rural districts looking to change the method for calculating the value of millions of acres. The Senate plans to debate a bill on the subject Tuesday.
"This is hurting farmers now," said Sen. Stan Clark, R-Oakley, the bill's primary sponsor.
The Department of Revenue's Property Valuation Division, or PVD, uses a formula that bases values on statistics for net income derived from land from 1992 to 1999. The Kansas Constitution requires that agricultural land be valued according to use.
The formula considers gross income derived from the land, expenses, net income and the capitalization rate, or the 5-year average of the Farm Credit Bank loan rate for land.
Clark acknowledges that his bill, which adjusts the formula to make its results more consistent over time, still needs some tweaking.
One issue concerns applying consistent values to similar land and soil types. PVD lists 3,800 different types of soil in Kansas.
Clark said PVD wants to use soil types exclusively to assess value, which he thinks is inappropriate.
"The reality is that cattle don't always graze on the best soil types; they graze on the best grass," Clark said.
Establishing homogeneous regions will help take some of the nonsense out of the appraisal process, Clark said. The bill also would allow for county appraisers to weigh in, taking into account factors that often lead to discrepancies in values.
Sen. Dave Corbin, R-Towanda, one of the bill's co-sponsors, said the intent is to get a better handle on why values which increased 6 percent in 1999 continue to increase.
"It remains to be seen if we get this through," said Corbin, chairman of the Senate Assessment and Taxation Committee. "We're trying to get the attention of PVD. I think we woke them up pretty good."
Scott Holeman, a PVD spokesman, said the agency does not support changing the valuation process.
"The Kansas Constitution requires that the Legislature provide for a uniform and equal basis of valuation and rate of taxation," Holeman said. "If any individual county appraisers have the option of deviating from the current standards, agricultural land will not be uniformly valued across the state."
Clark said the problem Holeman worries about already exists.
For example, he said, PVD divides the state into nine crop reporting districts. A piece of land that spans the Logan-Thomas county line lies in two different districts.
The land in Logan County with no road dividing it is $30 per acre higher than the same soil farmed by the same owner in Thomas County.
"It's absolutely not uniform and equal when we can point out these kinds of discrepancies," Clark said.
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