Tax relief for farmers may not be enough in school district referendums

WORTHINGTON - The wait is finally over for school administrators following the passage of a state bill that means a tax cut worth more than $1 million, including tax relief for farm owners in districts conducting school bond referendums.

The tax credit - commonly referred to as Ag2School - gives farm owners a 40 percent tax relief in current and future bond referendums. The law will need to be examined by the legislature biennially, depending on the state’s budget.

For instance, if District 518’s $79 million referendum were been approved last November, an agricultural homestead with an estimated market value of $1,069,000 would have seen a tax increase of $1,221. With the implementation of the tax credit, the same household would have been paying an additional $730. This information was given by District 518 Superintendent John Landgaard during a June 2 work session.

The credit aims to help school districts, especially in rural areas, facilitate the approval of bond referendums. However, many think the Legislature’s efforts won’t have a significant impact.

Jim Joens Jr., a longtime Wilmont farmer, said he believes the credit isn’t going to change the minds of many farmers who have been opposing previous District 518 bond referendum proposals.

“To me, it’s not going to make a whole lot of difference if we get the tax or not,” Joens said. “It’s not near enough. It will do some, but not enough, to help people to go out and vote for it because it’s not enough relief.”

District 518 board member Joel Lorenz, a farmer for almost 40 years, said he thinks the Ag2School tax credit is a step in the right direction to make the tax system more fair. However, liked Joens, he feels a 40 percent tax credit is not sufficient enough to motivate farmers to support a referendum.

“It will help the agriculture land tax situation, but still taxes are so high,” Lorenz said.

Lorenz said Minnesota’s tax system needs to be corrected by the Legislature. In the meantime, though, he believes district’s such as Worthington’s are caught in the middle of the problem.

“On one hand it’s a tax burden for farmers, but on the other hand it (resolving the overcrowding of the district) needs to be done down the road,” Lorenz said, noting that the school population is estimated to keep growing, making the district facilities unfit for the student body.