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Farmland Assessment Law Changes Implemented

Local farmland owners may have noticed a difference in their 2015 farmland assessments: the percent change in EAV (equalized assessed valuation) on different parcels may vary.

Unlike previous years, we no longer have the flat 10% up or down limit with farmland assessment. The change is due to an amendment to the Farmland Assessment law passed by the Illinois state legislature in 2013.

The new law limits the amount of change to 10% of the EAV of the median PI (productivity index), which is PI 111. The simplest way to explain the change is that soils below PI 111 went up by 10% or more of their individual EAV. Soils above PI 111 went up by less than 10% of their respective EAV.

To understand the purpose of the change, we need to take a look at the history. When farmland assessment was first implemented it was an income based formula. Prior to the law, farmland was assessed at market value.

The dynamics of the economy caused some volatile movements in assessed valuations. In an attempt to stabilize the EAV for local taxing bodies, the legislature passed a 10 percent up or down annual cap on the movement of any individual PI and related EAV in 1986.

Over the years, the 10 percent cap caused a growing disparity in EAVs eventually reaching a 42:1 ratio on the highest rated soils to the lowest soils. In 2014, a soil with a PI of 82 had an EAV of $13.87 while a PI of 130 was $645.93.

The relative productivity of the best and worst soils is not 42:1. If it was, then marginal land in McLean County would be selling for about $300 per acre.

The change is designed to correct the inequity and reduce the spread, while gradually bringing lower level PIs into better alignment with productivity.

For more information, contact the McLean County Assessor’s office at (309) 888-5130 or McLean County Farm Bureau at (309) 663-6497.

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