MICHIGAN CITY, Ind., Sept. 29 /PRNewswire/ -- As budgets are tight and county officials look to maximize community resources, a new study from Purdue University on the Cost of Community Services (COCS) for Indiana Counties and School Corporations was released today at the Association of Indiana Counties Annual Conference. Where previous studies have taken a single-county approach, this latest research, commissioned by Indiana Soybean Alliance, provides a unique look at the fiscal contribution of different land uses in nearly all Indiana counties.
"Economic development decisions are extremely complex," said Larry DeBoer, professor of agricultural economics at Purdue University. "This study covers virtually the entire state and uses more local data than ever before, to serve as a useful supplemental planning tool for local governments as they decide how to best allocate land and resources."
The COCS study compares local government service costs to revenue collected across three different property sectors – residential, business and agriculture. While previous COCS studies have used a single set of cost shares for distributing resources among the three sectors, this study provides seven different cost share allocations, or alternatives, to help local governments evaluate which scenario is most similar to their county.
"This study reveals that by keeping agriculture land in production in Indiana – and supporting agriculture expansion in the areas of livestock and biofuels – local governments can keep costs of services down and boost revenue, as the sector generates on average two and a half times more in taxes than the actual costs it imposes or services it receives," said Mike Yoder, Indiana Soybean Alliance board member and Elkhart County commissioner. "This is an important consideration for county officials to keep in mind, particularly as we approach a statewide vote in November that could stand to increase agricultural property taxes even further."
Viewing the study from an agricultural perspective, Allocation 3 provides the most balanced look at all three sectors as it recognizes the actual use of agricultural land and vehicles. Within Allocation 3, the study highlights important cost and revenue assumptions that must be considered when assessing land use for agricultural purposes:
- Property Value – Agricultural property, which typically stays in the same family for decades, is currently assessed based on its use value, reflecting actual costs to the community, as opposed to residential or business property which is assessed by market value or potential selling price. If viewed by market value, agricultural land can be seen as up to one-third more costly to the local government and include speculative uses which may not impose actual costs as farmland turnover tends to be low.
- Vehicle Use – Given the unique way agricultural vehicles are used (i.e., more seasonal use and shorter-haul travel needs), farm trucks are driven – on average – about one-eighth the miles as compared to business trucks, and produce less strain on county roads.
- Service Population – As rural counties impose fewer community costs from related public services (i.e., schools, libraries and crime protection) than urban areas, the agriculture sector demands significantly less funds for service population than do the residential and business sectors. For example, corn and soybean fields do not require these services, but farmers pay for them through their residential property taxes.
- Property Tax – Due to policy changes over the past four decades, including homeowner tax deductions, the agriculture and business sectors now collectively contribute the greatest share in property tax revenue, each paying well in excess of their assessed property value.
This study was funded with Indiana soybean checkoff dollars. For more information about the Indiana Soybean Alliance, visit www.IndianaSoybean.com.
About Indiana Soybean Alliance
The Indiana Soybean Alliance works to enhance the viability of Indiana soybean farmers through the effective and efficient investment of soybean checkoff funds and the development of sound policies that protect and promote the interest of Indiana soybean farmers. The ISA is working to build new markets for soybeans through the promotion of biodiesel, livestock, international marketing, new soybean uses, aquaculture, and research. ISA is led by an elected farmer board that directs investments of the soybean checkoff funds on behalf of more than 28,000 Indiana soybean farmers and promotes policies on behalf of the ISA's 900 dues-paying members.
This communication was funded with Indiana soybean checkoff dollars.
Indiana Soybean Alliance
SOURCE Indiana Soybean Alliance