FARM REAL ESTATE TAXES~

Transcription

1 RET-16 MARCH 1977 ~ll2bb FARM REAL ESTATE TAXES~ 1975 ) ECONOMIC RESEARCH SERVICE U.S. DEPARTMENT OF AGRICULTURE

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3 Farm Real Estate Taxes--1975, by Mary L. Bailey. National Economic Analysis Division, Economic Research Service, U.S. Department of Agriculture. RET-16. ABSTRACT Farm real estate taxes for the United States totaled an estimated $2.9 billion in 1975, an increase of 7.7 percent over Taxes per acre went up from $2.70 in 1974 to $2.92 in Farm real estate values continue to rise at a higher rate than real estate taxes, explaining the drop in the effective tax rate from 80 cents per $100 value in 1974 to 76 cents in The real estate tax continues to be a major source of revenue for State and local governments. Tax receipts have grown to meet greater demands for State and local services and programs. Differential assessment laws.have helped to lower the increase in real estate taxes in the farm sector. KEYWORDS: Farm real estate tax, real estate tax, property tax, taxation, agricultural taxation Washington, D.C March 1977 i

4 PREFACE Taxes on farm real estate discussed in this report include all ad valorem taxes levied by State and local governments. Special assessments on improvements such as drainage, irrigation, and weed control are excluded insofar as possible. Estimates were derived from a nationwide survey conducted in the spring and summer of 1976 by the Economic Research Service. The survey covered more than 37,100 sample farms. Cooperation of the more than 3,400 local tax officials who assisted in the collection of data for this report is gratefully acknowledged. The tax series in this publication is required by law; according to the 1935 Amendments to the Agricultural Act of 1933, the prices-paid parity index is required to reflect taxes per acre on farm real estate. ii

5 FARM REAL ESTATE TAXES by Mary L. Bailey, Economist National Economic Analysis Division Farm real estate taxes for the United States totaled an estimated $2.9 billion in 1975, an increase of 7.7 percent over 1974 (table 1).1/ u.s. average tax per acre went up from $2.70 in 1974 to $2.92 in 1975 (table 1 and fig. 1). The U.S. index of farm real estate taxes per acre, 1967=100, a component of the prices-paid parity index, rose from 154 in 1974 to 166 in 1975 (table 2). On the State level, changes in farm real estate taxes ranged from an increase of 20.2 percent in Wisconsin to a decrease of 2.4 percent in New Mexico. Fifteen States experienced increases greater than 10 percent; 15 registered increases between 5 and 10 percent; 14 had increases less than 5 percent; and taxes decreased in 6 States (table 3 and fig. 2). For the amount of taxes levied per acre by State, see table 4. 1/ Post-1960 farm real estate tax data contained in this report are revised estimates. These data are based on work which (1) incorporated new post-1964 acreage weights based on the 1969 Census of Agriculture, and (2) incorporated post-1964 adjustments in tax figures based on the 1970 Survey of Agricultural Finance conducted by the Bureau of the Census. (For the 1970 Survey of Agricultural Finance tax figures, see table 133, U.S. Bureau of the Census, 1969 Census of Agriculture, Farm Finance, Vol. I, Part II, Washington: U.S. Government Printing Office, 1974, p. 176). The figures are final through Post-1960 revisions may be found in "Revised Estimates of Taxes Levied on Farm Real Property, ," by Jerome M. Starn and Eleanor L. Courtney, Economic Development Division, Econ. Res. Serv., U.S. Dept. of Agri., Stat. Bull. No Revisions have been made in the post-1970 tax data incorporating acreage estimates of the Stat. Reporting Serv., U.S. Dept. of Agri. 1

6 Effective Tax Rate The tax per $100 value, which measures the effective tax rate, fell from 80 cents in / to 76 cents in 1975 (table 1 and fig. 1). On the State level, tax per-$100 value decreased in 38 States, increased in 10 States, and was constant in 2 States (table 5). In most States, farm real estate values continued to rise at a higher rate than real estate taxes, thereby explaining the drop in the effective tax rate. The rise in real estate taxes on farmland has been relieved by State differential assessment programs, which are discussed below. Taxes Compared to Farm Income ]/ Farm real estate taxes as a percentage of net and gross U.S. farm income increased in 1975 (table 6). As a share of net farm income, real estate taxes went up from 7.7 percent in 1974 to 8.6 percent in The increase is a result of a 7.7-percent rise in taxes and a drop in net farm income from $34.2 billion in 1974 to $33.2 billion in Real estate taxes as a share of gross farm income also rose slightly, from 2.7 percent in 1974 to 2.8 percent in 1975, even though gross farm income increased from $98.9 billion in 1974 to $101 billion in Farm real estate taxes in 1975 were 5.4 percent of personal income of the farm population (this income comes from both farm and nonfarm sources) (table 7). Status of Differential Assessment Laws!!_/ In most localities, zoning laws and planning have not adequately controlled land use. To help minimize the loss of prime agricultural land and to control urban expansion, State governments have enacted differential assessment laws. Forty-five States now have some form of differential assessment legislation. Table 8 shows the type of laws enacted in each State. 2/ In the 1974 tax series, RET-15, Mar. 1976, an error was made in calculating tax per $100 value in Oklahoma, Texas, New Mexico, Nebraska, Montana, North Dakota, South Dakota, Wyoming, Colorado, Utah, Nevada, Arizona, California, Idaho, Oregon, and Washington. See table 5 for corrections. ll For a historical analysis of the property tax in relation to income, see "The Agricultural Sector and Horizontal Equity of the Property Tax: A Historical Look," by Jerome M. Starn and Ann Gordon Sibold, Economic Development Division, Econ. Res. Serv., U.S. Dept. of Agri., published in the Journal of the Northeastern Agricultural Economics Council, Vol. V, No. 2, Oct / For a detailed analysis of the various State differential assessment programs, see "State Programs for the Differential Assessment of Farm and Open Space Land," by Thomas F. Hady and Ann Gordon Sibold, Economic Development Division, Econ. Res. Serv., U.S. Dept. of Agri., Agri. Econ. Rpt. No. 256, Apr. 1974, and for case studies on several States, see 11 Untaxing Open Space," prepared by the Regional Science Researc~ Institute in Philadelphia under contract with the Council on Environmental Quality, John C. Keene, Principal Investigator, Apr

7 Differential assessment laws can be classified into three general types--use value assessment, deferred taxation, and contracts and agreements. Legislation in some States contains elements of more than one type. Rules vary from State to State as to the eligibility of the land. Some States require that the land will have been in agricultural use several years before it is eligible for differential assessment; other States require only that the land be in agricultural use on the assessment date. In some States, differential assessment is automatically granted for all farmland, and in other States a landowner must apply for it. In regard to agriculture, use value assessment laws provide for the assessment of farmland on the basis of agricultural income or productivity, rather than the land's market value. There are no provisions for future use of the land. Like use value assessment laws, deferred taxation laws assess farmland on its agricultural'use; but when the farmland changes to nonagricultural use, the law provides for collecting the deferred tax for several previous years. The number of years for which the deferred tax is collected varies by State, and some States charge interest penalties on the deferred tax. The amount of deferred tax is the difference in the amount that would have been levied under standard assessment and the amount levied under use value assessment. States which have contract and agreement laws provide for voluntary contracts or agreements between the landowner and the State or local government. The landowner agrees to keep eligible land in agricultural use or some other specified use for a certain number of years. In return, the State or local government grants use value assessment on it. The major goals of differential assessment legislation are to preserve land in its present use and to provide property tax relief to farmers or other persons who own land which has either a high market value, or ecological value, or both but from which a small income is derived relative to the worth of the land. In most States, not only farmland but also forest land, recreational land, or any open land that has ecological or historical significance is covered by differential assessment. The effectiveness of differential assessment laws in preserving agricultural land and in redistributing property tax burdens is difficult to determine at the national level. However several studies have been done on State and regional levels to determine the impact of differential assessment programs on land use and the shifting of tax burdens.2/ Financing State and Local Government Programs Increasing real estate taxes reflect rapidly r~s~ng expenditures of State and local governments. In 1975, State and local government expenditures totaled 21 For a comprehensive bibliography on differential assessment and the property tax, see "Untaxing Open Space" prepared by the Regional Science Research Institute in Philadelphia under contract with the Council on Environmental Quality, John C. Keene, Principal Investigator, Apr

8 $ billion, 12 percent over 1974 (table 9 and fig. 3). The costs of providing existing services, especially education and police protection have spiraled. Also, high unemployment has pushed up welfare costs. Development of new programs has driven up costs further. In all, State and local expenditures for services and programs rose from about 10 percent of gross national product in 1960 to 15 percent in To meet increasing demands, State and local governments have had to legislate greater tax receipts, of which the real estate tax is a major source. However, for the past several years, property taxes have accounted for a continually declining share of receipts (table 10). Perhaps because of the inequities and administrative problems associated with the property tax, State and local governments are turning to other sources of revenue. Sales and use taxes are becoming important sources to State governments. Forty-five States now impose a sales tax. In fiscal 1976 (ending June 30, 1976) sales tax collections increased 10.6 percent over fiscal 1975.~/ Federal aid has also provided a major source of revenue to State and local governments. The Advisory Commission on Intergovernmental Relations estimates that in fiscal 1975, total Federal aid accounted for 27 percent of State-local general revenue from own sources; and in fiscal 1976, it accounted for 29.5 percent.z/ One of the major goals of the Federal revenue sharing program was to provide relief from property tax burdens. Traditionally, the local property tax has been the major source of revenue used to finance public education. However, many States now provide financial aid through State and Federal funds to local school districts in order to equalize expenditures per pupil statewide. The practice of State governments equalizing expenditures per pupil began in 1968 in California; John Serrano contended that the quality of public education was dependent on the wealth of the local school district since the local property tax base was the main source of revenue for financing public education. He believed the education system should reflect the wealth of the entire State. The State Supreme Court in 1971 affirmed this position. This case started a trend which spread to several States, until a case from Texas, Rodriquez vs. San Antonio School District, was appealed to the U.S. Supreme Court. In 1973, the Supreme Court ruled against Rodriquez by a 5 to 4 vote. The majority opinion held that the quality of public education, which is a function of State and local governments, does not fall under the equal protection clause (14th Amendment) of the U.S. Constitution. On December 30, 1976, the California Supreme Court reaffirmed the Serrano decision. The court stated again that the current system of financing public schools through local property taxes, with wide disparities in the wealth of the tax bases, violates the State constitution's equal protection prov1s1ons because it denies equal educational opportunity to students. The California ~/ State Tax Review, Commerce Clearing House, Vol. 37, No. 50, Dec. 14, Zl Significant Features of Fiscal Federalism, 1976 Edition I. Trends, Advisory Commission on Intergovernmental Relations, June

9 Supreme Court stated that the U.S. Supreme Court's Rodriquez decision in 1973 had no bearing on the 1971 California decision since the State constitution's provisions of equal protection were sufficient to interpret education as a fundamental right and support the California decision. The California legislature has until 1980 to decide how to finance public schools. Other taxes considered are a statewide sales tax or a statewide property tax. Also under consideration is the revision of school district boundaries so the assessed valuation would be equalized per student. On May 13, 1976, the New Jersey Supreme Court, like the California court, ruled that it was unconstitutional to finance public education through local property taxes, because the quality of a child's education was dependent on the wealth of his parents and where he lived. Effective July 1, 1976, the New Jersey legislature approved a State income tax to provide revenue for public schools. It is too early to determine what effect the decisions in New Jersey and California will have on local property tax systems in other States. If this is the beginning of a trend, State and local governments will have to look to other sources of revenue to finance certain activities, particularly, public education. 5

10 FARM REAL ESTATE TAXES DOLLARS 3~ ~ ~ ~ 0\ 1 I..,..1'\J "" /Tax per $100* JWiF ,. I... ~~..r ~I w:: --~--...' I "Tax per acre ~ 0'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''' *BASED ON MARKET VALUE. USDA NEG. ERS (11 Figure 1

11 CHANGES IN TAXES LEVIED ON FARM REAL ESTATE PERCENTAGE ~ z,g '"''""" J INCREASE 10.0 and over ~ ~ Under 5.0 CJ Decrease USDA U.S. INCREASE-7.7%.-#'... NEG. ERS 2417-n 111 Figure 2

12 00 EXPENDITURES AND INDIRECT BUSINESS PROPERTY TAX* RECEIPTS OF STATE AND LOCAL GOVERNMENTS $ BIL _, 4 State and local 1 1 government 1 expenditures I,,,,,,,,,,',, Indirect business property tax receipts 0 ~... 1-~~~~ I I I I I I I I I I I I I I I= I I I I I I I I I I 1946 '50 '55 '60 '65 '70 '75 '80 *INCLUDES ALL REAL ESTATE TAXES, AND BUSINESS PERSONALTY. SOURCE: U.S. DEPARTMENT OF COMMERCE USDA NEG. ERS (12) Figure 3

13 Table 1--Taxes levied on farm real estate: Total, amount per acre, and amount per $100 of full value, United States, Year Total taxes Million dollars Taxes per acre - - Dollars - - Tax per $100 of value.. Year Total taxes Million dollars Taxes per acre Tax per $100 of value - - Dollars : 1891 : 1892 : 1893 : : : : : 1938 : : o l.ll : 1896 : 1897 : 1898 : 1899 : 1900 : : 1902 : 1903 : 1904 : ll0.5 ll p : : : : : : : : : : : 1906 : : 1908 : 1909 : : : : : : : 1911 : 1912 : 1913 : 1914 : : 1956 : 1957 : : : , , , : 1916 : 1917 : 1918 : 1919 : /... : 1, : 1, : 1, : 1, : 1, : 1921 : 1922 : 1923 : 1924 : : 1, : 1, : 1, : 1, : 2, : 1926 : 1927 : 1928 : 1929 : : 2, ~/... : 2,375, : 2, : 2, : 2, so 1930 : 1931 : 1932 : 1933 : 1934 : : 2, / Starting with 1960 includes Alaska and Hawaii. ~ Revised through

14 Table 2--Taxes levied on farm real estate: Index numbers of amount per acre, by States, selected years, State and region ) Maine.... : New Hampshire.. : Vermont... : Massachusetts.. : Rhode Island.. : Connecticut... : Region I... : rso New York.. : New Jersey. : Region II. : Pennsylvania.. : Delaware... : Maryland..... : Virginia : West Virginia. : Region III : North Carolina... : South Carolina. : Georgia : Florida.... : Kentucky.... : Tennessee.... : Alabama..... : Mississippi. : Region IV.. : Ohio..... : Indiana.... : Illinois.... : Michigan.... : Wisconsin. : Minnesota... : Region V... : Arkansas... : Louisiana.... : Oklahoma.... : Texas : New Mexico.... : Region VI... : Iowa.... : Missouri.. : Nebraska.... : Kansas..... : Region VII. : Montana... : North Dakota. : South Dakota.. : Wyoming.... : Colorado... : Utah : Region VIII.. : Continued

15 Table 2 --Taxes levied on farm real estate: years, by States, selected State and region Nevada. : Arizona.:. : California : Hawaii : lfi3 186 Region IX. : Idaho : Oregon.. : Washington.. : Alaska.. : Region X : United States :

16 Table 3--Total taxes levied on farm real estate, by States, selected years, !I State and 2/= region Million dollars Maine : New Hampshire.. : ~ Vermont... : Massachusetts... : Rhode Island.... : Connecticut... : R Region I.... : {!], 9 New York : New Jersey..... : Region II... : Pennsylvania.... : Delaware... : Maryland.... : Virginia : West Virginia... : Region III... : North Carolina... : South Carolina... : Georgia.... : Florida : Kentucky : Tennessee..... : Alabama.... : Mississippi... : Region IV... : Ohio : Indiana.... : Illinois : Michigan : Wisconsin..... : Minnesota... : Region V..... : Z59.6 8] 5 3 Arkansas.... : Louisiana : Oklahoma... : Texas : New Mexico..... : ,0 Region VI.. : Iowa : Missouri : Nebraska : Kansas..... : Region VII..... : Montana : North Dakota... : South Dakota. : Wyoming..... : Colorado : Utah : Region VIII... : Continued 12

17 Table 3--Total taxes levied on farm real estate, by States, selected years, /--Continued 2/= Zi 1975 Million dollars Nevada.. : Arizona.. : California..... : Hawaii..... : Region IX.... : Idaho : Oregon. ;'.. : Washington.. : Alas.ka.... : Region X. : United States.. : , , , , , / Totals may not add due to rounding. II Revised 13

18 Table 4 --Taxes levied on fann real estate: Amount per acre, by States, average , selected years, State and :Average: region : : Dollars Maine : New Hampshire... : Vennont..... : Massachusetts... : Rhode Island... : Connecticut... : Region I... : New York... : New Jersey..... : Region II... : Pennsylvania... : Delaware... : Maryland..... : Virginia.... : West Virginia... : Region III... : North Carolina.. : South Carolina.. : Georgia : Florida : Kentucky : Tennessee : Alabama : Mississippi... : Region IV.... : Ohio : Indiana : Illinois..... : Michigan... : Wisconsin.... : Minnesota... : _J..79 Region V..... : Arkansas.... : Louisiana..... : Oklahoma..... : Texas : New Mexico.... : Region VI.... : Iowa : Missouri..... : Nebraska.... : Kansas..... : Region VII.. : Montana.... : North Dakota... ; South Dakota : Wyoming.... : Colorado..... : Utah.... : Region VIII.... : ':l" Continued 14

19 Table 4--Taxes levied on farm real estate: Amount per acre, by States, average , selected years, Continued State and :Average: region ; ; 1930' : Dollars Nevada..... : Arizona. : California.. : Hawaii.... : Region IX.. : / Idaho. : Oregon : Washington. : Alaska. : Region X. : United States :

20 Table 5--Taxes levied on farm real estate: Amount per $100 of full value, by States, average , selected years, State and :Average: region?909-13; 1/: : Dollars Maine : New Hampshire... : Vermont..... : Massachusetts... : Rhode Island.... : Connecticut..... : Region I.... : New York.... : New Jersey... : Region II.... : Pennsylvania.... : Delaware..... : Maryland..... : ss.54 Virginia..... : West Virginia... : _ Region III.. : North Carolina... : South Carolina... : Georgia : Florida : Kentucky..... :.so Tennessee : Alabama : Mississippi..... : Region IV... : Ohio : Indiana : so.64 Illinois..... : Michigan.... : Wisconsin..... " Minnesota.... : Region V... : Arkansas : ss.64.so Louisiana..... : Oklahoma.... : Texas : ss New Mexico... : Region VI.... : Iowa : so Missouri.... : Nebraska... : Kansas.... : Region VII. : Montana..... : North Dakota. : South Dakota : Wyoming..... : Colorado.... : Utah : Region VIII.. : Continued 16

21 Table 5--Taxes levied on farm real estate: Amount per $100 of full value, by States, average ,!\II selected years, Qontinued State and ;Average; y. region ?909-13; Dollars Nevada... : Arizona : California : Hawaii. : Region IX. :_ Idaho : Oregon : Washington : Alaska. : Region X : United"States : y Revised 17

22 Table 6--Taxes levied on farm real estate as a percentage of net and gross farm income, by States, selected years, ll State and region Net : Gross : Net : Gross : Net : Gross : Net : Gross : Net : Gross : Net : Gross farm : farm : farm : farm : farm farm farm : farm : farm : farm : farm : farm :income:income:income:income:income:income:income:income:income:income:income:income Percent Maine... : New Hampshire... : Vermont... : Massachusetts... : Rhode Island... : Connecticut... : 7~.0~ =2~.3~~1~0~ ~6--~3~ ~0--~1~2~ ~2~--~3~.4~~1~4~ ~3--~4~ ~1--~1~4~ ~8~--3~.3~~2=1~.5~~3~ ~7- Region I... :~8~-~7~~2~ ~7~~9~ ~3~~3~ ~0~~9~ ~7~~3~ ~2~~1~4~ ~2~~3~ ~9~~1~0~.~7~~3~.~0~~1~7~.6~~3~ ~5= New York... : New Jersey... : 5~ ~9~--=2~.0~~1~1~ ~3--~3~ ~7--~1~4~ ~8~--~4~.2~~2~3~ ~6--~5~ ~8--~1~7~ ~9~--4~.6~-=3~0~.3~~5~ =1~ Region II... ~~7~ ~4~~2~ ~6~~1~2~ ~2~~4~ ~0~~1~2~ ~6~~3~ ~9~~1~4~ ~6~~4~ ~4~~2~0~ ~0~~4~ ~7~~2~8~ ~8~~5~ ~3= Pennsylvania... : Delaware... : Maryland... : Virginia... : West Virginia... : 2~.4~--=l~.l~--~3~ ~7--~1~ =2--~8~ ~3~--=1~.7~~1~1~.~3--~1~,~8--~9~ ~9~~1~.5~~l~O~.o~~l~ ~5- Region III... :~4~ ~4~~1~ ~7~~7~ ~1~~2~ ~2~~9~ ~5~~2~ ~7~~1~0~.~2~~2~.~8~~9~ ~9~~2~ ~5~~1~0~.2~~2~ ~5= North Carolina... : South Carolina... : Georgia... : Florida... : Kentucky... : Tennessee... : Alabama... : Mississippi... : 2~.1~--=1~.2~--~3~ ~0--~1~ =1~~3~ ~5~--=1~.3~--~4~ ~3--~1~ ~4--~3~ ~8~ 1= ~1~--~5~.2~~1~ =2- Region IV... :='2= ~4~~1~ ~3~~3~ =6~~1~ =4~=4= =3~=1~ =6~=5= =4~==1= ~8~~4~. :':::7 ~==1=. 5=~=5=. 2==::::1::::. =6= Ohio... : Indiana... : Illinois... : Michigan : Wisconsin... : Minnesota... : 7~.0~--~3~.3~~1~1~ ~3--~3~ ~9--~1=1~ ~1~--~4~.1~~1~1~,~0--~4~ ~3--~~~-~5--~2~ ~4~--~6~.9~~2~ ~6- R~ion V... ::~=6~.1=~2~ ~8~~12~ ~2~~4~ ~2~=1~1~ ~1~~4~-~3~~1~5~-~4~~5~ =3~~9~ =5~~3~ ~6~~9~ =1~=3~ =5= Arkansas... : , , Louisiana... : 2.0 1, , Oklahoma... : Texas... : New Mexico... : ~3~.0~--=1~.3~--~5~-~7--~1~ ~7--~8~ ~8~--=2~.0~--~5~ ~9--~1~ ~5--~5~ ~7 1~-~2~--~3~.9~~1~-~0- Region VI... ;=:::3:: ::3==1= =5=='6= ::0:::::::::::2:: :::2=:::::::::7::::.::9=:=::2::.::4=:=::8::.::0=:=::2::.::4=:::::6:::.::4=::::::1::: ::8 =:::::::7::. 5=:=::2:::. =0 Iowa... : Missouri... : Nebraska... : Kansas... : ~5~.8~--~2~-~9--~1~0~ ~9 4~ ~1~_1_1_._5 ~4~.0~ 1_2_._3 4~ ~1~--7~._6 2~.9 ~9~ ~7--~3~-~l~ Region VII... :~4~-~7~~2= ~4~=1~0= ~9~~3= =8~~9~ =7~~3= =6~~1~2= =5~~4= ~0~~8= ~7~~2= =8~~8=.5~~2= =9= 18 Continued

23 Table 6--Taxes levied on farm real estate as a percentage of net and gross farm income, by States, selected years, l/--continued State and. region Net : Gross Net :Gross Net : Gross Net ~ Gross Net : Gross Net : Gross farm farm farm : farm farm farm farm farm farm farm farm farm!income!income!income!income!income!income!income!income!income:income!income!income Percent Montana... :/ North Dakota.. : South Dakota... :/ Wyoming : Colorado..... : Utah :_6"--'-'. o, 2_..5_~14.:..:':...:7 :3::..: :...:4:..1=-7:...: :...:7 4.:..: :..:2'------'1::::2::.: :..:6c :3::..: :..:6c --'1=-3::.: :..:1, --.:3::.: :...:7_--'l"-'6"-'.'-"2'-----'4"-'.,_,o'-- Region VIII... ;= =5~ ~4~~2~ ~6~~9~ ~5~~3~ ~5~~9~ ~5~~3~ ~6~~1~1~.~2~~3~ ~7~~5~ ~8~~2~ ~4~~7~ ~4~~2~ ~8~ Nevada.... : Arizona.... : California..... : Hawaii.. : :..:5:..: ~6----=1~ :...:7 ~5~.3~--~1~ ~7--~6:..: ~3----=1~ :..:5: 1~.3~--~ ~8----=4~ ~7 1~.5~ Region IX.... :::=6:: :=1==2:: =:5':==:10:: :=8':=:::::3:: :=6':==1=3= =2'::::::=:::4:: ::0=:::::::1:=8:: :::8=:=::::::5:: :::1:::::=:::8::.:::8==3=.=2=:::::'1='1=.=9=:::::'3::.::6:::: Idaho : Oregon : Washington... : Alaska. : Region X.... ;~5~ ~9~~2~ ~6~=1~2~-~0~~4~ ~2~=1~2~ ~1~~3~ ~9~~1~1~ ~3~~3~ ~5~~5~ ~3~~2~ ~3~~7~ ~3~~2~ ~7= United States.. : ll Net farm income before deduction of farm real estate taxes includes net rent paid to nonoperator landlords. 19

24 Table 7--Taxes levied on farm real estate as a percentage of total personal income of farm population, United States, / Total Taxes as Total Taxes as Year personal percentage Year personal percentage income 2/ of income.. income J.j of income.. Million Million dollars Percent dollars Percent : 8, : 19, : 7, : 19, : 9' : 19, : 7, : 21, : 8, : 19, : 8, : 20' : 11, : 21, : 15, : 22, : 17, : 23, :. 18, : 22, : 18, : 26, : 21, : 27, : 23, : 26, : 26, : 27, : 21, : 30, : 22, : 31, : 24, : 33, : 24, : 40, : 21, : 56, : 20, : 52' , / Total personal income before deduction of farm real estate taxes includes net rent paid to nonoperator landlords. Jj Revised ( ). 20

25 Table 8.--States with differential assessment laws ~ Use value assessment Arizona y Arkansas Colorado Connecticut Delaware Florida Idaho Indiana Iowa Kansas Louisiana if Maryland Missouri New Mexico North Dakota Oklahoma Oregon Y y South Dakota! Tennessee Vermont Wyoming Deferred taxation Alaska Hawaii Illinois Kentucky Maine Maryland Massachusetts Minnesota Montana Nebraska Nevada New Hampshire New Jersey New York North Carolina Ohio Rhode Island Texas Utah Virginia 7/ Washington Contracts and agreements California Florida Hawaii Louisiana if Maryland New Hampshire New York Pennsylvania Vermont Washington 1/ Michigan has a circuit breaker law. A tax credit on state income tax is given to eligible farmers for that portion of real property taxes which exceeds a certain percentage of farm income. South Carolina's property tax assessment system was revised in The major aspect of the law dealt with the classification of property and accompanying assessment ratios. On farmland the assessment ratio is 4 percent of agriculture use value, whereas on other property assessment ratios range from 6 to 10-1/2 percent of fair market value. 2/ All land is taxed according to current use value, 3/ Farm, forest and open space land sold within 10 years of initial purchase is subject to a conveyance tax ranging from 10 percent of sales price if sold in first year to 1 percent of sales price in loth year. 4/ Law becomes effective in S/ Deferred taxation applies if land in agricultural use is unzoned agricultural. 6! Use value assessment is limited to farmland in independent school districts. 2/ Counties exercise option to use the law. 21

26 Table 9.--State and local government expenditures relative to gross national product, Year Gross National Product Billion dollars State and local government expenditures Billion dollars State and local government expenditures relative to GNP Percent / :/ , ,3 117.' / , , , , , , Source: Survey of Current Business, July 1976, Vol. 56, No. 7, U.S. Dept. of Comm., Bureau of Economic Analysis. 22

27 Table 10.--Indirect business property tax receipts relative to total receipts--state and local governments, Year Total receipts of State and local governments 1./ MilU.on dollars Indirect business property tax receipts Jj Million dollars Indirect business property tax receipts relative to total receipts, State and local governments Percent ,302 13,005 14,878 16,291 4,836 5,346 5,938 6, ,833 19,601 21,235 22,866 24,182 26,465 29,350 31,685 33,521 36,512 7,143 7,696 8,385 9,096 9,673 10,448 11,453 12,609 13,764 14, ,919 43,085 46,653 49,870 54,415 59,000 64,733 71,031 81,412 91,403 16,238 17,580 18,958 20,245 21,687 23,187 24,535 26,964 29,861 32, , , , , , ,498 36,546 40,258 42,977 46,033 48,735 52, / Excludes contributions for social insurance and Federal grants-in-aid. 2/ Includes all real estate taxes and business personalty. Source: Survey of Current Business, July 1976, Vol. 56, No. 7, U.S. Dept. of Comm., Bureau of Economic Analysis. 23

28 UNITED STATES DEPARTMENT OF AGRICULTURE WASHINGTON, D.C POSTAGE AND FEES PAl D U.S. DEPARTMENT OF AGRICULTURE AGR 101 THIRD CLASS JENKIN44SA4i2 180SS OOOl I JENKINS AMER AGRl ECON DOC CTR A HJ 445 GHI WASHINGTON DC 20018