The Division of Property Valuation reports that agricultural land values in Kansas will show significant increases when annual change of valuation notices are mailed in March.
The average increase is estimated at 7.5% over 2000 values; however, in some areas, dryland will increase even more.
"We realize this is not the kind of news Kansas farmers need right now, after experiencing a year of poor crop yields, low market prices and higher production costs," said Mark Beck, director of property valuation. "However, the formula for determining values is based on an eight-year average of productivity and income that is clearly outlined by Kansas law."
The eight-year average used to determine this year's values is based on Landlord Net Income (LNI) statistics from 1992 to 1999. Next year's values will be set by LNI statistics from 1993 to 2000.
"There were significant net income gains made in the 90s--and that is one of the factors affecting this year's increase," said Beck. "The new values are a direct result of lower interest rates and higher yields and prices from the last decade. We remind taxpayers that the formula used to calculate land values includes data from a time period when the farm economy was better than today--and we understand some landowners may be confused at why values are escalating now."
In Kansas, agricultural land is assessed at "use" value, rather than at market value. Market value is the most probable selling price of a property in an open market transaction. Use valuation is based on the land's potential for productivity. Consequently, highly productive soils receive a higher value than moderately productive soils. There is no correlation between use value and market value.
County appraisers in all 105 Kansas counties will mail the change of valuation notices by April 2. The Division of Property Valuation is in the process of planning regional public meetings to explain the increases in agricultural land values.