(Editor’s note: Real estate, including agricultural land, is treated in two ways for property tax purposes. Valuation is market value, or in the case of agricultural, land use-value that is determined by earnings potential. Assessed value is a percentage of market value, 30 percent in the case of ag land. For example, if an acre of crop land is valued at $202, as is the case in Allen County this year, its assessed value is 30 percent, or $60.60. Taking that a step further, a levy of 1 mill raises $1 for each $1,000 of assessed valuation, or a touch over 6 cents on an acre of land valued at $202 an acre.)
Higher commodity prices have been to the advantage of more than just Allen County farmers. The county, school districts and community college also will benefit.
In the latest eight-year rolling average of farm land valuation, Allen County’s increased overall by 8.9 percent.
Last year ag land was valued at about $31 million, Appraiser Sandy Drake noted, which means all land zoned for agricultural use will jump to about $33.8 million this year.
While that is the land’s value — based on use — the increase won’t mean as much to assessed valuation, the figure used by local governmental units when they figure taxes for budgets.
“Ag land is assessed at 30 percent,” Drake said.
Without getting too immersed in numbers, that means assessed valuation of ag land will increase about $900,000 to a little over $10 million.
Assessed valuation is the key figure for figuring budgets. Mill levies are applied to assessed valuation to determine tax bills for owners, and how much goes into public coffers.
From that method, the 2014 values assigned ag land are $56 per acre for grassland and $202 an acre for dry land, or that which is tilled.
“That’s a long way from what farm ground is selling for,” Drake said, noting that per-acre prices of $1,200 to $1,500 have been common in recent years.
KANSAS STATE University determines earning potential for farm land from several factors and assigns values, Drake said. The method was established by the Legislature several years ago.
Drake pointed out that commodity prices have been on the rise in recent years, prompting valuation increases in the rolling average.
The assessed valuation bump of a little less than $1 million alone will push the county’s overall assessed valuation to the neighborhood of $97 million. Drake doesn’t expect much more of an increase this year, with ag land “being the only thing that’s going up this year. Residential and commercial values are staying about the same.”
The next major increase for Allen County’s valuation will come when Enbridge’s Flanagan South pipeline and its pumping station a mile southeast of Humboldt are added to tax rolls.