Farm Building Assessments Spark Calls for State Property Tax System Overhaul

Indiana farmers are experiencing significant increases in agricultural building assessments, prompting the Indiana Farm Bureau to urge state lawmakers on Wednesday to revise Indiana’s property valuation system. Representatives told the Interim Study Committee on Fiscal Policy that updated state cost tables have led to varying assessments for similar structures across county lines, affecting barns, grain bins, and livestock facilities ahead of next year’s tax bills.

Katrina Hall, Indiana Farm Bureau’s senior director of policy strategy and advocacy, reported that the organization commissioned Policy Analytics to examine agricultural building assessments after members began reporting large increases earlier this year. The initial analysis showed a statewide increase of about 44% in assessed value for the agricultural buildings studied.

Later data, reflecting appeals and discussions with assessors, reduced that increase to 29%, still amounting to about $2 billion in additional assessed value for taxes payable in 2027. Hall noted that more than half of the parcels in the later analysis experienced increases of at least 15%, highlighting the scale of the changes in assessed values, not how much farmers’ tax bills will ultimately rise.

Hall stated that these discrepancies suggest a problem with statewide consistency, explaining that some assessors made adjustments to the cost tables while others appeared to use them without similar changes. This can result in identical buildings of the same age receiving different values in neighboring counties. She argued that appeals cannot substitute for correcting the underlying assessment process, stating, "Appeals are like a parcel at a time."

To address these issues, the Farm Bureau is calling for the state to consider a nationally recognized valuation system, such as Marshall & Swift, and to examine outdated depreciation schedules. Hall noted that taxpayers often get appraisals using such systems when challenging assessments, creating a mismatch with the state’s current tools.

The organization also proposed moving agricultural improvements from the 3% property tax cap category to the 2% category. Hall’s analysis estimated this change could result in approximately $44 million in savings across agricultural properties. These proposals follow Indiana’s 2025 property tax overhaul, which adjusted homeowner deductions, credits, business personal property taxation, and local government revenue rules.

State officials acknowledged the concerns but cautioned that assessment changes alone would not resolve complaints about rising tax bills. They instead recommended preserving annual adjustments while improving assessment data and testing automated valuation tools. Tim Rushenberg, general counsel for the Department of Local Government Finance (DLGF), affirmed that any changes to Indiana’s assessment tools must still meet constitutional requirements for uniform, equal, and just valuations.

Rushenberg explained that assessed value is only one part of a property tax bill, which also depends on local budgets, tax levies, deductions, credits, and caps. He indicated that there are many factors influencing a tax bill, making a direct link from assessed value to taxpayer impact unreliable. He added that annual adjustments, known as trending, help keep assessments aligned with market evidence between physical reassessments, and less frequent updates could allow inequities to accumulate.

Barry Wood, the DLGF’s assessment division director, mentioned that the state is moving toward annual review of cost schedules or a related adjustment factor to help limit large fluctuations, a change from the previous four-year update cycle. Rushenberg stated that the department is seeking data on construction costs, appraisals, and other evidence to evaluate whether particular agricultural building schedules need correction. Public comments on the readoption of the state’s real property assessment rule close on October 23.

Lawmakers on the committee also raised broader concerns, including for longtime homeowners whose assessments climb as new or renovated houses change the surrounding market, even without their own property improvements. Rep. Cherrish Pryor, D-Indianapolis, urged officials to make the assessment process easier to understand and reduce the need for homeowners to challenge inaccurate values, particularly for older individuals. Wood confirmed that assessors can distinguish between different types and ages of homes within a neighborhood when applying adjustments.

Hamilton County Assessor Kevin Poore suggested that automated valuation models could help identify inconsistencies requiring closer review, noting an assessor-led pilot is underway in Hendricks, Clark, Lake, Vanderburgh, LaPorte, and Allen counties. The DLGF recommended beginning with an advisory or quality-control pilot, while retaining local assessor judgment and taxpayers’ notice and appeal rights. Sen. Fady Qaddoura, D-Indianapolis, pressed for clear error measures and an analysis of who would pay more or less before broader implementation of such models.

In a separate update during the same committee meeting, lawmakers heard about Indiana’s childcare voucher programs and proposals to finance expanded access ahead of the 2027 budget session. Discussions focused on sustaining the state’s recent voucher expansion and drawing more investment from employers, philanthropy, and local governments.

Adam Alson, director of the Office of Early Childhood and Out-of-School Learning, confirmed that Gov. Mike Braun intends to continue the voucher expansion supported by a one-time $200 million infusion announced this spring. Alson stated that the additional 14,000 Child Care and Development Fund (CCDF) vouchers are funded solely with state dollars for one fiscal year, and the governor is committed to continuing this increase in enrollment.

September figures presented to the committee showed 46,579 children enrolled across the CCDF and On My Way Pre-K programs, with 17,732 on their combined waitlists. Despite the increase in vouchers, regulated childcare capacity fell about 3.3% from a year earlier, to 156,151 seats. Alson added that the administration is pursuing regulatory changes and additional ways for employers, philanthropy, and local governments to invest.