Land values have risen

The Bismarck Tribune: Average North Dakota farmland values, for purposes of taxation, have increased 29 percent. Property taxes on that land should not automatically be allowed to increase by the same amount, and that’s what will happen if local governments don’t reduce their level of taxation accordingly.

Taxpayers will need to be looking over the shoulders of local boards and commissions during budget-making this year, to make sure schools and counties do not get a tax windfall courtesy of farmers and ranchers.

Agricultural land values across the state increased between 19 percent and 38 percent, depending upon the county.

To their credit, state Tax Commissioner Cory Fong and Agriculture Commissioner Doug Goehring have given everyone a heads-up about the increase.

Fong and Goehring also provided a complicated reason for the increase. It involved the Legislature letting a statutory minimum capitalization rate for agricultural land lapse. As a result, the Tax Department calculated values using a capitalization rate based on a 10-year average of mortgage rates on North Dakota farmland loans. It lowered the rate, which in turn increased the value of farmland.

Other factors changing the value of agricultural land were production data (annual gross returns) and a cost of production index.