Area farmers who have been hit hard by an ongoing trade war with China could see another financial setback — a higher property tax bill.
The Iowa Department of Revenue this week released the “rollback” used to calculate, in part, how much residents will pay in property taxes in 2020.
Assessed property values rose 6.4% statewide for residential properties, according to the Dubuque County Assessor’s Office.
To limit property tax growth, the rollback dipped from 56.9% to 55.1% and will allow less of the assessed value to be used in tax bill calculations.
Agricultural land saw large drops in assessed value. However, the rollback for those properties will increase from 56.1% to 81.5%, according to the Iowa Department of Revenues.
That’s expected to increase the taxable value on agricultural land by 1% in Dubuque County and about 3% statewide, even though assessed values dropped by 30%, said County Assessor Dave Kubik.
“If the levy rates stay the same, taxes will go up by 1% (for farmers) on their property bills due next September,” Kubik said.
Even a nominal tax increase could add financial hardship for farmers struggling to pay bills amid depressed commodity prices, trade disruption, declining farm income and lower farmland values, said Jason Heisler, of Dyersville, Iowa, a lender at MidwestOne Bank.
“Pretty much, prices are break-even or a loss” for most Iowa farmers, said Heisler, who is treasurer of the Dubuque County Farm Bureau. “With the China trade war and (United States-Mexico-Canada trade agreement) not being passed, there’s limited market now for crops and livestock.”
He said U.S. Environmental Protection Agency waivers exempting oil refineries from renewable fuel blending standards also are “hurting our corn markets,” sending demand for ethanol plummeting.
“A 1% increase is going to make it harder for farmers who are struggling,” Heislar said. “If they were already behind on bills, they may be forced to sell ground to pay debt, which will put a lot of land on the market and drop values even further.”
The annual rollback is designed to limit property tax growth on the “actual value” of real estate.
The last piece of information needed to calculate tax bills is the levy rate. That will be determined early next year after cities, school districts, community colleges and other taxing jurisdictions conduct hearings to approve their budgets and tax rates for the fiscal year that begins July 1.
“It’s just too early to put real numbers as to how this is going to impact people other than general trends,” Kubik said.