State takes issue with Brown County ag land assessment plan
Brown County cannot make upward adjustments on the value of agricultural land based on market sales, according to an evaluation of its ag assessment plan by the state.
The county also cannot set values higher than the top per-acre total determined by the state Department of Revenue based on productivity, according to the report.
The assessment found some truth to concerns raised in January by former Director of Equalization Michael Hauke Jr. He claimed the county was illegally and improperly assessing ag land by splitting the county into neighborhoods and overassessing 15 southern townships by 18 percent.
Hauke was fired during the Jan. 9 commission meeting.
Commissioners were provided a letter detailing the state’s evaluation during their Tuesday meeting at the Brown County Courthouse.
“Their points are they do not want us to have a neighborhood with a greater-than-1.0 (100 percent) factor,” said Iiterim Director of Equalization Gene Loeschke. “We’re above market value as indicated by the productivity model.”
The county has been assessing the 15 townships at 118 percent of the top-dollar production value. That has been done using a map the county crafted years ago. It was designed so that land that would likely sell for more money would have higher assessments. It divided Brown County into three neighborhoods.
Other townships in Brown County have been assessed at either 97 or 87 percent of top productivity.
Brown County’s top per-acre value under the state’s productivity model is $3,620 for this year.
About a decade ago, the state shifted the way it assesses ag land from a model based on market sales to one that based on the productivity of land. The top per-acre amount is based on gross revenue per acre during the previous eight years. The number is different from county to county and adjusted each year.
Brown County can use neighborhoods, the state determined, but they must be based on productivity, not market sales. The differences have to be supported by the quality of soil, according to the report.
Loeschke plans on doing that using a map with four neighborhoods, two of which will assessed at the same level — 87 percent of top productivity. WHY?????
The state “will allow my new proposed neighborhood for 2018, payable 2019,” Loeschke said.
Brown County does not have to refund any property taxes on ag land because no valuations were appealed.
Loeschke said he will be able to discuss his reasoning and justifications for adjustments to the plan with Michael Houdyshell, division director for the state Department of Revenue.
The state set Marshall County’s top dollar value at $2,887 and Day County’s at $3,152 — a 9.1 percent difference. There’s a 22 percent different between Edmunds County’s top dollar per acre value of $2,250 and McPherson’s at $2,740.
When Marshall and Day and Edmunds are viewed as one large county and Edmunds and McPherson are viewed as on large county, they have similarities to Brown County, Loeschke said.
“I believe that if Brown County were split into two counties, if we had a courthouse in Aberdeen and one in Frederick, it would indicate the same kind of difference as Marshall and Day (Counties) do. On the other side, McPherson and Edmunds have a little tougher land than we have, but again if we slid Brown County over, we’d virtually cover it all,” Loeschke said.
“That also shows our county has the same trend from north to south as the county does on either side of us. Plus it shows variation from east to west. So I’m adjusting north to south, east to west, similar to the counties around me. And I’m adjusting that just based on sales because that’s all I really have, but sales show me those same kind of trends,” Loeschke said.
Commissioners had no qualms with the state’s evaluation of the plans, but were irritated that plans from past years had been approved by the state.
Commission Chairwoman Rachel Kippley questioned why the state found no issues with the county’s previous plans that included neighborhoods and upward productivity adjustments.
Commissioner Duane Sutton echoed Kippley’s comments.
“They received our assessment plan every year and were aware of what we were doing, so that’s the confusing part,” he said.
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New Brown County neighborhoods for agricultural land
To be assessed at 100 percent productivity: Columbia, Claremont, Cambria, Putney, Riverside, Aberdeen, Bath, Henry, Groton, Warner, Gem, West Hanson, West Rondell, East Rondell and Garden Prairie townships.
To be assessed at 87 percent of top productivity: East Hanson, Bates, Mercier, Highland, New Hope, Ordway, Prairiewood, Lincoln, Westport, Garland, Brainard, Oneota, Greenfield, Richland, Frederick, Liberty, Savo, Osceola, Hecla, Portage, Lansing, North Detroit, Shelby and South Detroit townships.
To be assessed at 80 percent of to productivity: Palmyra, Allison, Franklyn, Carlisle and Ravinia townships.