Lawmakers began discussing last week a potential change to debt service payments. The dialogue sprung from a joint hearing between the House Property Tax and Education Finance committees.
At that meeting, committee members reviewed a proposal by Rep. Steve Drazkowski to shift debt service payments from the Adjusted Net Tax Capacity (ANTC) tax base, which includes agricultural land and seasonal and recreational land, to Referendum Market Value (RMV). RMV currently doesn’t include either.
Drazkowski’s plan would involve moving portions of commercial and industrial property from one tax base to the other along with some portion of seasonal and recreational taxes moving from ANTC to RMV.
Confused? So was the joint committee.
A complex reshuffling of tax bases seems to be a bit much for this short legislative session.
A simpler approach to drive farm tax relief would be to simply increase the newly adopted Ag2School bond credit from 40 percent to 45 percent of 50 percent as was originally proposed.
The state could (and should) increase its share of debt service equalization as well. Pushing on these two fiscal policy levers seems to be a more direct and clear way to ease the burden of property taxes paid on school bonds.