Elmore County Republican Central Committee

Special Meeting Regarding Irrigated Farmland Assessments in Elmore County

June 11, 2015
The meeting was called to order at 7:00 PM by Chair Megan Blanksma.
The prayer was offered by Arlie Shaw and the Pledge of Allegiance was led by Donna Bennett.
The roll was called and a quorum was found to be present.
Business. The rules of the forum were discussed and the request was made for minutes from the
meeting to be distributed to everyone present. Names who do not normally receive e-mail from the
committee will receive the minutes of the meeting.
Megan introduced Ron Fisher, Elmore County Assessor who gave a brief overview of the process and
how we arrived at where we are. Ron stated that what we are discussing tonight comes down to a few
basis questions:
1) What business does state have in Elmore County? He explained that the County is not
autonomous but subject to laws passed by the legislature and rules that govern the County are
made by State agencies. The County sets property assessments in accordance with State Law
and Rules. State law declares that assessments must be at market value. After the assessors set
the values the State Commission makes sure values are equitable across state i.e. that values
for comparable properties in the various counties are comparable.
2) Why so much of increase in value this year? It appears that values for irrigated agriculture have
probably not increased since maybe 1980. At any rate its been a long time since they were
adjusted. Assessments were made if the property was new ground and so forth but not
countywide.
3) Why do we have only 2 years to bring up to value? According to law we should be raising the
assessment this year completely to 100% of market value to be in compliance. Our County
Commissioners wanted to stretch out to 2-5 years to ease the shock but according to law we
must comply sooner. We are hoping to get 2 years to get values up to what they should be to
ease the shock this year. State Tax Commission meets in August & will need to approve taking 2
years to get up to market value. If they do not approve it the full adjustment will come for this
years taxes.
4) The changes in assessed values are not due to Tax Commission forcing the issue. They are just
doing their job according to the law. One of the members saw that the valuation for irrigated
agricultural land values had not changed for long periods. The values should vary as the
capitalization rate varies. The capitalization rate is determined annually by Farm Credit Bank in
Spokane. Values should change each year just based on the change in the capitalization rate but
have not. This was the red flag that triggered an investigation by Ron to see why the values
were not changing.
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Ron started as Assessor in 2011. It was at the beginning of his 2nd Term that he became aware of the red
flag and started his investigation into the problem.
Ron then introduced the representatives from the State Tax Commission
a. Allen Dornfest
b. Matt Virgil
c. Kathlynn Ireland State Tax Presentation. Consulting Appraiser for State Tax
Commission. She also consults with Elmore County on valuations.
Kathlynn began her presentation on how properties are valued and what is required under Idaho law.
She stated that she wanted to be transparent & wanted to bring people in to be a part of the process.
Questions can be asked as we go through her slides.
Kathlynn began by asking Why are we here? Data was compared from surrounding counties and
Elmore County irrigated ag values are very low in comparison (maybe 35% of similar counties) and have
not changed over the years. The annual capitalization rate should change assessed values but they have
not been changing. This is a big red flag! Other counties have much higher assessments for irrigated
agriculture. Some of the counties that Kathlynn showed have very low irrigation costs and arent
directly comparable to Elmore County. Some of the other counties appear to be more comparable and
are irrigated ag lands there still have much higher assessments.
One of the members of the audience asked if the legislature has restricted budget increases for
Counties. Alan Dornfest responded to the question that in 1995 the legislature placed limits on budget
increases for taxing districts within the state. The limit is a 3% growth in revenue dollars per year. A
district can increase a little more than 3% if there is new construction within the district or if they annex
new areas. There is no limit on reductions in budgets.
Kathlynn then discussed how values are determined for irrigated Ag. The values for assessments are not
based on sales of ag property but are based on the income method of appraisal. Under Idaho law the
speculative value of farm property is exempt. That means that if property is being sold for five times its
value for agriculture the assessed value is based on the value for ag and not the sales prices which may
be driven by speculation due investors or developers.
Ron raised assessments this year substantially but values are still not comparable to nearby counties.
Currently in the county there is only one area that has highest assessment valuation (now about $1000).
The county average is about $700. Which is much lower than the values in Owyhee, Gem and Jerome
County which are about $1400 per acre.
Kathlynn then explained some of the rules & statutes that govern assessed valuations in the counties.
These include Idaho Code 63-314 and Rule 63-314, Code 63-602K and rule 613, and Code 63-604 and
Rule 645. She also explained that just because your assessment goes up it doesnt mean that your taxes
are going up by the same amount. The levee rates (i.e. the factor applied to your assessed valuation) is
determined months after the assessments are made to meet budget demands. It does follow that if
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your assessments go up that your taxes will go up but not to the same extent as the increase in
assessment.
State law under statute 63-602k requires that the capitalization rate developed by Farm Credit Services
must be used to calculate values. There is a 5 year rolling average that is applied to the data used to
level out humps & valleys in the capitalization rate, cost data and income data. Under Idaho Code 63314 all property must be at current market value on the assessors records.
A County ratio study is performed to determine if properties are at market value and the results must be
between 90-110% of market value. Commercial properties are studied every year to determine that the
assessments are correct. If the assessments arent correct across the property categories tax burdens
shift from one property sector to another. This is even more important for commercial properties since
they dont have any exemptions like agriculture or home owners.
The factors used to determine market value for irrigated agricultural lands in Idaho are based on the
following factors:
1) Gross Income uses a 5 year rolling average crop price given to the County by the Idaho Tax
Commission.
2) Capitalization Rate as determined by Farm Credit Services
3) Expenses This is the big kicker to be determined correctly to correctly determine valuation.
The assessors office needs information from property owners on expenses so they can correctly value
properties in an area. This data is needed to develop the medians and averages for cost data that are
required to determine costs for comparable areas. One area where costs are comparable is where
irrigation costs are comparable. This prevents the application of cost data across very different areas.
For example comparing parcels in areas where water costs are low with parcels on the Sailor Creek
Project where energy costs are very high to get water from the river to the farms would result in the
over valuation of the Sailor Creek property while under valuing the low lift areas.
The discussion appeared to be getting bogged down in the details and Megan gave a summary of where
the presentation is going & tried to get an understanding of what was coming so we could move ahead
with the discussion.
Kathlynn explained that expenses are determined on a rolling average as well as income. The current
average cost for irrigation used in Elmore County is $68 per acre. This is very low for some areas of
Elmore County.
On the income side crop prices are set by the University of Idaho based on market data. Most of the
income data is set by State tax commission based on the U of I data so only the expenses can be
determined at the county level.
Alan Dornfest explained that a person can go to the tax commission website and look at your code area
(Elmore County) and get an estimate of 2015 taxes. Estimates are normally within 1-2% of the actual

bill. One way to reduce taxes is to participate in taxing district budget meetings. The site is found at:
tax.idaho.gov and go to the estimate taxes link. You can then estimate your taxes.
A question was asked about land classifications and why havent other categories gone up? From the
assessment data it appeared that only row crops went up. It was explained that all of irrigated ag
needed to go up to stay in accordance with law. Other classifications dont appear to have had the
problem that irrigated ag has experienced.
Kathlynn explained that the County is now using agricultural neighborhoods rather than soil types or
individual appraisals as the basis for property assessments. Using agricultural neighborhoods simplifies
assessments over using much more detailed data such as soil type. The Assessors Office has a map that
shows the neighborhoods and can adjust the neighborhood boundaries if necessary. Differing rates for
expenses will be developed for like farms within the neighborhoods. An example of a neighborhood
would be an irrigation district.
Megan then compared two pieces of property one from Elmore & one from Owyhee and focused on
per acre irrigation costs. The property in Owyhee County was low lift and showed a 133% per acre
increase in assessed value across the county line. In Elmore County a parcel in a (medium) high lift area
had the assessed value increase 308% this year. Between the two parcels water lift is very different.
The Elmore County assessed value was 81% of Owyhee value for ground last year. This years value was
187% of the Owyhee County land. Both values increased but the values are no longer proportional.
Now high lift ground in Elmore County is more valuable than the low lift ground in Owyhee County. This
shows the need for the assessor to use data showing actual expenses to in their attempt to value
irrigated ground.
It was also noted that some irrigated parcels are not irrigated or some are in areas that, while water
costs are very low, do not have adequate water for the whole season and are thus much less valuable
than parcels that have adequate water supplies. Megan suggested that parcel owners need to get
together with neighbors in the various neighborhoods and combine their data in their appeals to the
County equalization board.
The question was asked about whether the Owyhee data is correct. We dont know anything about
their data but the assessor needs to look at land across county boundaries to ensure county data is
comparable. In order to have correct county assessments the assessors office needs accurate data
from farmers. Some dont want to share expense data considering it to be proprietary and none of the
governments business. The assessors office, however, needs expense data to get assessments correct.
It was noted that the assessors office really hasnt asked for this kind of data before. They have
received bits and pieces of the data but not real expense data so the really dont have correct expense
data for use in their analysis.
The question becomes Where do we go from here? The income data from the University of Idaho is
considered to be very good and the capitalization rate is mandated by law. The only place to make
changes is with the expense data which is the problem. Currently the cost data the county has is not

very good. The next step is to appeal to the board of equalization but individuals need to present data
in order for the board to make corrections.
At present the property assessments have been calculated based on the data the County had available.
Since the assessed valuation of the county will increase the tax rates will go down to keep the same
number of dollars available to the various taxing districts. The result will be that taxes will shift from
homeowners and commercial properties to ag as the new assessment valuations take effect. The
problem has been 35 years in the making and is being corrected in 2 years. It was stated that irrigated
ag property owners cant absorb these increases in only two years. Alan Dornfest reiterated that an
owner can use the tax estimator to estimate the actual impacts of the increased assessments. The law
doesnt allow any extension of time to phase in the new assessments.
It was explained that the County Assessor must act on data as they get it into their hands. A discussion
begun on who broke the law by not raising the assessment earlier and that it was someones fault. It
was explained that the law doesnt allow going back to fix the problem there was a tax shift from ag to
residential and commercial that occurred gradually over the years and now it must be fixed in one year.
They are hoping to be allowed to do it on two years but the Tax Commission could come back and force
the changes to occur this year. It was explained that the attempt to find blame wouldnt help the
correct the problem.
It was also explained that the state has asked for data for two years & didnt get good data in. When
they got the data in they found the problem & must be fixed. The County is currently trying to fix in 2
years rather than 1 year but that will be up to the State Tax Commission. The law says current market
value and doesnt allow any time to fix any problems. It requires that each year the assessments must
be based on current market value.
Ron explained that he understands that it creates budgeting problems for current owners but there are
no penalties for past inequities that have arisen due to the prior shifting of tax burdens.
Megan said everyone needs to take time to look at their assessments and challenge them. At this point
we need to find if assessments are accurate rather than looking at what we will be paying for taxes since
that has not been determined but will be based on the new assessments.
Allan, in reference to earlier comments by Representative Neilson, explained that since no one had data
that indicated any problems with the data that no one broke any law. Currently the Assessors Office
is using regional data so if individuals can bring in local data on costs they can do a better job in the
assessments.
SINCE THE ASSESSMENTS HAVE BEEN MADE THE NEXT STEP YOU MUST TAKE IS TO FILE AN APPEAL
WITH THE BOARD OF EQUALIZATION (MADE UP OF THE COUNTY COMMISSIONERS). What this means is
that you take your data and appeal the assessment. This requires Notice of Appeal with the Board of
Equalization. THIS MUST BE FILED BY JUNE 22, 2015 TO BE EFFECTIVE. A COPY OF THE FORM IS
ATTACHED. PLEASE PRINT THE FORM IN COLOR. The Board of Equalization makes adjustments for
entire areas of county not just individual properties.
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You must file a form for each parcel (unless instructed otherwise) but when an adjustment is made it
will be for larger area likely for whole neighborhood for example irrigation district. THE BURDEN IS
ON THE PERSON FILING THE APPEAL TO PROVE THE ASSESSMENT IS WRONG SO BRING YOUR EXPENSE
DATA TO PROVE THAT THE ASSESSEMENT IS WRONG.
Bring your data to board of equalization. Can show water district assessment data bring evidence to
be considered. Here is a suggested set of data to bring to the Board of Equalization:

Crops Grown
5 year average yields
Type of Rent Paid Cash or Crop Share
Number of Acres Planted to each crop
Share of Income
Share of Expense
Current Water Costs

An appellant needs clear evidence that the assessment is wrong. A copy of your Schedule F from your
taxes would work. At minimum an appellant needs expenses for each neighborhood farm (not
necessarily for each parcel). Evidence needs to be good - usually not just a hand written note. If your
expenses include farms in more than one area it would be much more helpful to break them out by
neighborhood that you farm in rather than just the totals for multiple neighborhoods. Many costs may
be similar between neighborhoods and an average will be adequate but for expenses like water costs or
other costs that vary widely between parcels / farms should be broken out to gain the most benefit.
To get data on expenses make appointment with assessor to go over data used in assessment. Get
together as neighborhood to present data to commissioners / board of equalization. This will help get
assessments done correctly. ASSESSORS OFFICE WILL HAVE MAPS SHOWING THE NEIGHBORHOOD
THAT YOUR PARCELS / FARMS ARE LOCATED IN. This will help you see what costs are different for your
neighborhood.
In order to be heard by the Board of Equalization you must file an appeal by the 4th Monday of June
(June 22nd this year) before 5:00 PM. Neighbors can go together to present data and the commissioners
can hear the appeals in mass if they want. When adjustments are made it will be for all the farms in a
neighborhood that is charge of board of equalization to make property values fair within the County.
If your appeal is denied by the Board of Equalization you can appeal to the State Tax Commission with in
30 days of the mailing of the results from the Board. From board of equalization hearings (next Monday
through 14th of July (2nd Monday in July) then can go to state board of appeals Must file by June 20th by
statute. State can grant extension to give time for appeals.
If the Board of Equalization does not grant the appeal the decision can be appealed to the Tax
Commission within 30 days of the mailing (not receipt) of the decision of the Board of Equalization.

HARDSHIP: If the raise in assessment will create a hardship for you you can file for a hardship
exemption from the taxes that will result from the higher assessments. THIS MUST BE FILED IN
ADDITION TO THE APPEAL AND IS DUE ON JUNE 20TH OF THE TAX YEAR. SINCE THE 2OTH IS A SATURDAY
IT WOULD BE BEST TO FILE THIS REQUEST ON FRIDAY JUNE 19TH.
The data used in the analysis comes from several sources but can be located on the following websites:
www.farm.ewg.org subsidies
www.ers.usda.gov very broad information mostly countywide
The Assessor spreadsheet relied on data from the two sites listed below:
www.nass.usda.gov Quickstats option can search for data by state and county.
www.extension.uidaho.edu.crops.asp University of Idaho Site
Senator Bert Bracket explained that Owyhee County went through this a few years ago. This problem is
common and shifts around the state as problems with valuations are found.
The dates to remember are the 20th (plan on the 19th) for the hardship exemption and the 22nd for an
appeal to the Board of Equalization. A hardship exemption is individual and an appeal helps everyone in
your area. You need data for both and both must be filed by the respective deadlines if you want to do
both.
After some further discussion a motion to adjourn was made by Bunni Farnham, seconded and was
passed. The meeting adjourned at 9:40 PM.