How much money do farmers make? One answer gets Lincoln senator’s attention

Farm Forum

Just how badly are farmers and ranchers hurting?

State Sen. Patty Pansing Brooks figures it isn’t much, based on data shared with a group of state lawmakers on September 24.

Nebraska farms made an average $112,966 in income each year from 2009 to 2013, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service. That figure, which is after taxes and other expenses, is more than double what the average Nebraskan took home in income last year.

And in 2012, when farm incomes peaked, the most efficient farms were bringing in more than $600,000 annually, according to Nebraska Farm Business Inc., which provides financial analysis for farmers and ranchers.

“People are making a lot of money, and they’re the ones that are most vocal about those property taxes,” Pansing Brooks said.

Much of her central Lincoln district is low-income – 36 percent of its households make $25,000 or less each year – and she didn’t hear a lot about property taxes while campaigning last year, she said.

“This was not one of my top five issues.”

Her eyebrows raised – repeatedly – over the farm income data as senators toyed with ways to address a crescendo of complaints about property taxes, particularly from farmers and ranchers. The discussions are part of a joint effort by members of the Legislature’s Revenue and Education committees to study property taxes and school finance this fall.

Rural senators in the room were quick to question the farm income figure.

“I don’t think this is valid,” said Sen. Al Davis of Hyannis, a rancher himself whose district is the largest in the state and is dominated by cattle operations.

For example, he knows of a constituent whose land is in life estate, meaning it can’t be sold, who earns less than $6,000 per year after paying more than $10,000 a year in property taxes.

Farmers and ranchers are often accused of “hiding” their income through creative bookkeeping or purchases, like fancy trucks, that are ostensibly for business but actually for personal use. That doesn’t jibe with data showing six-figure farm incomes, Davis said.

Agriculture is the state’s top industry, said Lincoln Sen. Adam Morfeld, “and we need to continue to make sure it is competitive and profitable. … I think we also need to prioritize where we actually need tax relief.”

“I’m not convinced that there’s actually a problem when farmers are making a hundred grand net after taxes,” Morfeld said.

The median household income in Morfeld’s district, which includes downtown and northeast Lincoln, is $31,000 a year.

“There isn’t a lot of sympathy from some of the urban senators,” said Sen. Roy Baker, a former school superintendent whose district includes all of Gage County and southeast Lancaster County, including part of Lincoln.

Without urban senators’ support, any significant steps to lower property taxes probably won’t be targeted toward agricultural landowners or be sizable enough to address their concerns, he said.

“It won’t help people whose property values have doubled or tripled,” Baker said.

Soaring ag land values since 2008 have caused property taxes to spike along with them. Last year, ag land owners paid 32 percent of the state’s property taxes.

“I thought for sure it was going to be 90 percent,” Pansing Brooks said.

Farms and ranches cover 92 percent of the state’s land area, or 45.3 million acres, according to the USDA.

But farmers and ranchers only make up about 3 percent of the state’s population.

That 3 percent has seen “incredible success” in recent years, Pansing Brooks said.

“They just don’t want to pay the taxes, it seems to me,” she said.