Impacts On Property Taxes Of Reclassifying Flood-Prone Cropland In The South Delta Area Of Mississippi

Current tax appraisal procedures for cropland in Mississippi do not account for any negative impacts caused by frequent flooding in some areas of the South Delta. If flood-prone cropland values are significantly below average, the current tax system could generate inequitable tax burdens on owners of flood-prone cropland. A modified system of appraisal may be desirable to produce a more equitable tax structure. The purpose of this study was to evaluate different methods of reclassifying flood-prone cropland in the South Delta and to determine subsequent tax impacts on landowners and county tax revenue. Cropland tax data for Sharkey and Issaquena Counties were collected and different permanent reclassification schemes were proposed. Reclassification schemes were defined by lowering a parcel's capability class assignment by 1, 2, 3, or 4 classes if its elevation was below a specified trigger level. The impact that each reclassification scheme would have on landowners' taxes and the tax base in the affected counties was then estimated. In order to show the impact on tax shifts that would keep the county's tax base from declining, a new, higher millage rate was computed for selected reclassification schemes. After applying the adjusted millage rate to all properties in the county, changes in cropland taxes were reduced. Among the permanent reclassification schemes evaluated in this study, a trigger elevation level of 90 feet appears to offer reasonable tax impacts. Cropland parcels below 90 feet could be reassigned to the lowest capability class if the residents desired to provide the largest tax relief to these property owners. A more conservative reassignment scheme could be selected if desired. A temporary (year-to-year) reclassification system may provide more equitable tax distributions over time but would probably require more administrative costs to implement.