STATEHOUSE (March 13, 2010) - State Sen. Jean Leising (R-Oldenburg) voted in favor of compromised language in legislation aimed at stabilizing Indiana’s agricultural property assessments, a process farmers believe is currently unfair.

Senate lawmakers voted 50-0 in support of Senate Enrolled Act 396, sending the measure to Gov. Mitch Daniels for further consideration.

Leising, co-author of the legislation, said state figures show farmers are experiencing unanticipated increases in farmland assessments based on an experimental formula crafted in 2006. Leising continued to say, “Farmland assessments would double in a five year period without this legislation.”

Economists attribute fluctuations in farm assessments in part to speculation about alternative energy sources like ethanol, bio-diesel and bio-mass. This speculation caused a short-term spike in farm grain prices, which created a problem with the formula.

A statewide per-acre value for agricultural land is set each year by the Indiana Department of Local Government Finance (DLGF). According to Leising, the DLGF currently uses an adjusted six-year average and takes into account net-income and cash-rent models.

SEA 396, supported by the Indiana Farm Bureau, would use an adjusted rolling average that eliminates the highest value over a six-year period. Known by economists as the “Modified Olympic Average” technique in which outlier scores are disqualified, the model would give farmers and local governments more stable agricultural property assessments with slower growth, but perhaps be more representative of true market value.

“I am very pleased that the legislature has taken the first step to address the problems with the bare land assessment formula,” Leising said.