When Phil Ramsey opened his property tax assessment this spring, one number immediately stood out.
The assessed value of the grain bins and farm buildings on his Shelby County farm had jumped by more than 50 percent.
"Of course, that immediately got my attention," Ramsey said.
For Ramsey, farming is a family tradition that stretches back more than 160 years.
"My great grandpa moved in on this road in 1864," he said. "My grandpa lived here, my dad lived here, and now my sons, actually all three sons, will live here within eyesight."
Ramsey isn't alone.
Farmers across Indiana are seeing similar increases after the Indiana Department of Local Government Finance updated the construction cost tables counties use to assess agricultural buildings such as barns, grain bins and machine sheds.
Why assessments increased
Hendricks County Assessor Nikki Stoll said the previous cost tables had not been fully updated since before the COVID-19 pandemic, despite significant increases in construction costs.
"For years those cost tables were updated maybe every four years," Stoll said. "Then they actually hadn't been physically updated, I think, since prior to COVID."
The Department of Local Government Finance said the previous cost schedules had become undervalued and that the updated tables better reflect today's replacement costs.
In an emailed statement, the agency said it reviewed the updated schedules after questions were raised and "did not find any errors or issues with the updated costs."
The department also noted that the updated schedules are part of Indiana's cyclical reassessment process. Going forward, it plans to review or update the cost schedules every year to avoid similarly large changes.
Stoll said the timing of the update also presented challenges for county assessors.
"We were thrown a really big change at the very last minute," she said. "It was very difficult for all 92 counties to even wrap their brains around this kind of increase."
Stoll said assessors don't simply decide what buildings are worth.
"I think probably the biggest misconception is that I am the one who is making these values whatever I want them to be," she said.
Instead, county assessors are required to use the state's cost schedules, though they still have discretion when determining factors such as depreciation, condition and effective age. Property owners also have the right to appeal their assessments.
The Department of Local Government Finance noted that an increase in assessed value does not necessarily translate into the same percentage increase in a property's tax bill because local tax rates, government spending and tax caps also affect what property owners ultimately pay.
Another challenge
For Ramsey, the higher assessments come during one of the most difficult financial periods he's experienced as a farmer.
"Every turn this year we've got higher costs, starting with fertilizer," he said.
Ryan Hoff, Indiana Farm Bureau senior director of government affairs, said the assessment increases are arriving as many crop farmers contend with low commodity prices and rising expenses.
"It can be pretty significant," Hoff said. "Especially if you consider livestock operations that have a lot of buildings. They're going to be seeing bigger increases, potentially, than row crop farmers."
Farm Bureau plans to ask state lawmakers to move agricultural buildings from Indiana's current 3 percent property tax cap to the 2 percent cap.
Hoff said that change would not reduce assessments themselves but would lessen the tax burden created by those higher values.
He also encouraged farmers who believe their buildings may be overvalued to work with their county assessor in the future.
"Some assessors will do research with construction firms within the county to verify that the actual construction costs in their county are reflected in the manual," Hoff said. "They have the tools to adjust those downward if there is more depreciation or the cost to construct is lower."
For Ramsey, though, the assessments are just one more uncertainty in an already unpredictable business.
"We're just sitting on a roller coaster that we can't see what next is coming," he said. "We just have to hang on and do our very best."
