The new CSR2 rating program is intended to calculate a Corn Suitability Rating with more simplicity, consistency and clarity. Ag professionals have long relied on the original program to help negotiate cash rents, put a value on a parcel of farmland or other day-to-day activities. The following guest post by Polk County Chief Deputy Assessor Randy Ripperger explores the conversion of the CSR2 rating system and implementation of state-mandated adjustments for non-cropland.
The Polk County Assessor revalued all agricultural classed property for the 2014 assessment. This revaluation was the result of two changes in the assessment formula: 1) implementing the new CSR2 soil rating system and 2) using the new formula for making adjustments to the productivity values of certain agricultural lands as mandated by changes in the Iowa Administrative Code 701-71.3.
In Iowa, assessments on agricultural property are based on the productivity and net earning capacity of the property. Assessors use the results of a modern soil survey in conjunction with the Corn Suitability Rating (CSR) system to spread the valuation among individual parcels of such agricultural property. The CSR system was first introduced in 1971 as a soil productivity rating system designed for equitable taxation. As a result of advances in soil science, CSR2 was released in 2013. The new CSR2 system is similar to the original CSR system, but has some differences. CSR2 primarily uses more of a data-driven model as compared to the original CSR system which used a judgment and experience-based system.
The Agricultural Adjustment Committee was formed in 2011 at the direction of Governor Terry Branstad, and consisted of representatives from across the state. Its purpose was to review practices for making adjustments to the assessed productivity values of certain agricultural lands to provide more consistency statewide for the assessments of non-tillable lands. The Ag Adjustment Committee came about because of a growing public awareness that some county assessors were making adjustments to various non-tillable lands, while others did not. Committee members made a recommendation that was enacted by the Iowa legislature in July of last year (see Iowa Administrative Code 701-71.3).
The new rule requires assessors to adjust non-cropland acres and also requires assessors to implement the adjustments for their entire jurisdiction by the 2017 assessment, or the 2019 assessment in the case of a hardship. Some counties, including Polk, implemented this new adjustment formula for 2014.
Impact in Polk County
The change in the total aggregate rating points across Polk County from CSR to CSR2 increased slightly, about +0.36%. This is comparable to the statewide average, which was +0.3%. The mean average change in the total rating points per parcel was +0.32%, while median average change was +0.93%. These numbers would directly correspond to changes in the assessed value attributable to implementing the new CSR2 rating system. The chart to the left shows the relation between the two rating systems, with the points representing the total CSR and CSR2 rating points for each parcel in Polk County.
Polk County was one of 44 counties in the state that developed adjustments for land use prior to the 2014 assessment; 50 counties did not. These adjustments, in general, were more generous than the newly mandated adjustment scheme and will no longer be used. Under the new system, adjustments will be made for any non-cropland with a CSR2 that is greater than 50 percent of the average CSR2 for cropland in the county. And the adjustment will be based upon the five-year average difference in cash rent between non-irrigated cropland and pasture as published by the National Agricultural Statistics Service. Here’s an example of the calculation for Polk County.
Average county CSR2 rating for cropland: 82 CSR2
50% of average cropland CSR2: 41 CSR2
Example of non-cropland soil 11b CSR2 rating: 79 CSR2
Non-cropland CSR2 points to be adjusted: 79 − 41 = 38 points
5-year average rent for non-irrigated cropland: $183.60
5-year average rent for pasture land: $39.10
Percent difference (rounded): $39.1/$183.60 = 21%
Percent difference times points to be adjusted: 38 points * 21% = 7.98 adjusted points
Adjusted CSR2 non-cropland: 41 + 7.98 = 48.98 adjusted CSR2 points
There are four categories of land use: cropland, building lot, non-cropland, and water; adjustments are made for building lot, non-cropland, and water uses.
Implementing both the CSR2 rating system and the new adjustment formula, the total aggregate adjusted rating points across the county increased by 5.5%. The mean average change in the total adjusted rating points per parcel was +11.0%, while median average change was +3.5%. The chart on the right shows the relation between the CSR/old adjustment scheme and the CSR2/new adjustment scheme on a parcel basis.
These changes correspond directly to changes in the assessed value attributable to both changes. However, in order to keep the same productivity value per acre as the five-year study conducted for the 2013 assessment ($1,629.14), the dollar per CSR point had to be adjusted from $20.88 per point down to $19.71 per point. In the end, of the 5,715 ag parcels in Polk County, 2,226 saw a land value increase, 3,228 saw a land value decrease, and 261 saw no change. The median percent change was -2.3%.
Single Parcel Comparison
A new feature on the Polk County Assessor’s website launched at the end of March shows actual calculations, including land use adjustments, made for the 2014 agricultural land value. It’s much more detailed than the information that was previously on the site and includes:
- A soil map of the property
- A CSR use summary (broken down by crop land and non-crop land)
- A breakdown by CSR soils
You can also review how the land was valued last year using the CSR rating system with the “old” adjustments by clicking on the “2013 CSR Report” link located above the soil map.
Any questions, you can call (515) 286-3014, fax (515) 286-3386, or email email@example.com.
Chief Deputy Assessor
Polk County, Iowa