In the past few weeks, there has been much controversy and speculation over the introduction of legislation in the Kansas legislature which would increase taxes paid by Kansas agriculture. These proposals would have a significant and devastating impact on our state’s largest industry.
Walking the halls in Topeka, I visit regularly with members of the Kansas Legislature, many who do not have direct ties to agriculture. While many legislators make a concerted effort to understand agriculture, it is a continuous challenge to bridge the gap between the rural and urban divide. We work daily to help those who do not have agricultural ties understand and appreciate the contribution that agriculture makes in our great state in terms of annual economic contribution and producing the safest and most abundant food supply in the world. Kansas agriculture annually contributes $53 billion to our state’s economy (37%) and employs 12% of the Kansas workforce - more than any other industry.
However, there is uncertainty and confusion about the way agricultural land is valued and taxed in our state. We do not support any changes to the current method of taxing agricultural land. The proposed changes would have far reaching and devastating impact not only on farmers and ranchers, but on rural communities and related industries supported by agricultural production. In addition, a number of proposals would dramatically increase taxes paid by rural citizens and devastate rural economies.
Governor Brownback, whose roots are deep in Kansas agriculture after being raised on a family farm in Linn County, personally understands the challenges of farming and ranching. The Governor does not support this legislation. It is not a part of his plan for Kansas, and certainly does not meet his goal of growing the agricultural and Kansas economy. Raising taxes on agriculture is not the right approach.
In 1976 Kansans recognized the wisdom of protecting the economic backbone of our state by passing a Constitutional Amendment allowing for the valuation of agricultural land based on income or production rather than market value. This protects the ability of farmers and ranchers to continue to produce the world’s food without being driven out of business by taxes based on high market values. Use value is critical to protect our ability to grow the agriculture industry in Kansas.
This system of agricultural use value was implemented in 1989. Kansas’ system is considered a model throughout the country; in fact, 42 other states have adopted a similar model of appropriate taxation of productive agricultural lands.
The proposed legislation would make drastic and sweeping changes to the Use Value taxation process. For those unfamiliar with the formula and rationale of tax calculation, this may not seem like a big issue. However, the proposal would result in a massive tax hike on the backs of our family farmers and ranchers in Kansas.
Some legislators have made the argument that farmers and ranchers are not paying their “fair share.” Nothing could be further from the truth. Although the current formula insulates producers from large swings in commodity prices, agricultural land taxes have increased overall by 59% since 2008. Today, Kansas landowners are facing these costs in a time of lower projected farm incomes. Many estimates indicate the proposed change would raise taxes as much as 10 times on these already high levels. This is an unfair tax hike on citizens who have long paid their fair share.
Others have argued that Kansas land is owned by mega corporations that can afford to pay more taxes. The reality is that less than one half of one percent of all the land in Kansas is owned by non-family corporations. The vast majority of agricultural land in our state is owned by family farmers and ranchers who have worked the land for generations. They are the ones who would shoulder the fallout from this plan.
I encourage you to continue sharing the story of the value of agriculture to you and your community. Your voices will matter as this debate continues. It is important for our industry to come together and be heard on these vitally important issues.
Kansas Secretary of Agriculture