What to think about the two percent tax cap on ag land?

Photo: Nora Flaherty

Photo: Nora Flaherty

NCPR’s Joanna Richards reported this morning on agriculture advocates’ support of a bill currently in the New York State assembly that would slow the rise of property taxes for farmers. A couple weeks ago, Joanna covered the story in some detail, explaining how rising crop values can increase the assessed value of farmers’ land, while actually not making much of a difference in their income.

Basically, corn and soy have become a bigger part of what North Country farmers grow, and those crops are rising in value, BUT at the same time they’re a major part of those farmers’ cows’ diets, so the cost of feed is going up. So they’re not making more money, many farmers argue, but they are paying more taxes. Although farmland is, overall, valued at less than residential land for tax purposes, some say they’re hitting the current 10 percent cap every year, increasing their taxes by thousands over the last several years (this is explained much better in Joanna’s piece.)

We’re all familiar with property tax increase caps from the controversy about the residential tax increase cap from last year, which has come up again and again since (including in a story from our newsroom today on education budgets in the Tupper Lake schools.) The agriculture cap raises some similar questions.

The Daily Courier-Observer reports that a majority at Monday evening’s St. Lawrence County Board of Legislators meeting voted “yes” on a resolution to support the bill, which would hold assessment increases at two percent a year (the resolution didn’t pass for technical reasons.)

Supporters of the bill argued at the meeting (as they have elsewhere) that rapidly-climbing assessments make farming too expensive for many. Legislator Frederick S. Morill, D-Hermon: “Agriculture generates wealth…we need to encourage agriculture industry in St. Lawrence County.”

Others, like Legislator Sallie A. Brothers, D-Norfolk, say that if the state (essentially) reduces the future tax liability of agricultural properties by cutting the increase from 10 percent to two percent, that takes money out of the pockets of others, like homeowners and other businesses: They’ll somehow have to make up that lost revenue.

That last point is a toughie: Local governments are already squeezed, and with the two percent property tax cap in place, sources of revenue for, say, local schools, are becoming tough to find (and it’s starting to show.) No one wants to pay more in taxes, but with strict limits on future tax assessments, how will we pay to keep going?

 

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22 Comments on “What to think about the two percent tax cap on ag land?”

  1. I guess that’s the new trend… special tax breaks for every special interest groups… except ordinary taxpayers.

  2. Jim says:

    The average NYS farmer pays north of $26 an acre annually in land tax, and this is on wasteland as well as productive tillable acreage. Compare this with the national average of $6 per acre. Here in the North Country most small farms have a high percentage of wasteland that is a serious enough drag on profitability without having to pay a king’s ransom to the government. The stage is being set to drive what’s left of agriculture out of New York.

  3. mervel says:

    I think farmers are in a unique situation, given that property itself is part of their production process.

    But I don’t like special breaks either. But you know this is a classic case, many of these farmers are not wealthy particularly in the north country, we are one of the last bastions of true family farming, they are more taxes than wealthier people because they have to own property to do their jobs.

  4. knuckleheadedliberal says:

    The problem is that too much stuff is being funded through property tax levies that should more properly be funded by the state though income tax. Working family farms – real family farms – are a benefit to communities and one-size-fits-all taxing is wrong headed.

  5. winnie says:

    Property taxes effect all of us and farmers should not get an exception to the laws for the rest of us.
    A 2% increase in assessments should be in place for all of us not just farmers.
    All people in business suffer from increased assessments ;not just farmers.
    Why should just farmers get this kind of break?

  6. bent over says:

    everyone would benefit from cap like that..I’m self employed here in fabulous St.Lawrence Co.,paying taxes like everybody else.I picked my job like farmers also did.they already don’t pay sales tax which would be a huge benefit for everyone.To say that they are more important than the regular people around them is wrong,all this article is telling me is I had better get ready for my taxes to go up.

  7. knuckleheadedliberal says:

    If the state paid the cost of many of their mandates then there wouldn’t need to be high increases in property tax.

  8. Two Cents says:

    farmers feed us…

  9. Here’s a radical idea: how about a fair, rational property tax system for EVERYBODY?

  10. dan3583 says:

    Based on what I’m hearing/reading re assessment issues, I agree we need to do some kind of reasonable reform. Speculators byuying property for more than it’s worth should not drive up everyone’s property value.

  11. Paul says:

    It is all “rearranging the deck chairs”. What you need is more capital in the area if you want to pay the bills.

  12. Jim says:

    Dan3583,

    Amen

  13. Charles says:

    Low cost power for the Indian reservations, Local development corporations handing our PILOT agreements like candy, Tax free zones around universities, Empire zones, now tax caps on farm land? Isn’t time NY just stops spending so much money? Maybe then we could all enjoy lower taxes not just the lucky few that are given these handouts.

  14. Zeke says:

    Maybe a cap would be okay if it was tied to allowing residents who own or rent property to vote on the county budget.

  15. Mervel says:

    I have to agree with knuckle, the issue is that we are trying to fund too many things through property taxes. It would be more fair to look at either the state income tax or the state sales tax. By a narrow focus on property you get all kinds of unfairness and inconsistency between what people are paying.

  16. Paul says:

    “Speculators byuying property for more than it’s worth should not drive up everyone’s property value.”

    These are the dumbest speculators I have ever heard of? Do you mean something else?

  17. Jim says:

    These are the dumbest speculators I have ever heard of? Do you mean something else?”

    I don’t believe he does. Novice buyers from the metro areas where a three bedroom on a half acre sells for $250K think they have a real bargain when they plunk down $250K for 160 acres and an old farm house. Same place would sit on the local market for years before selling for $125K. It’s all in the realtor’s savvy and marketing in the right areas and publications.

  18. Paul says:

    Sure but a “speculator” may be willing and able to hold the land for a very long time. Any buyer can look at the assessments and know what the property is worth. They may even not be a “speculator” and simply a buyer willing to pay a higher price than a local buyer. The market these days is not local. Prices are set by what the market is willing to pay (that is what the property is worth) even if the market is no longer local. But I agree that if you are looking to “flip” property you are probably making a mistake as a buyer in these markets up here. But the activity you describe is good for the tax base. If the “novice” from the city is willing to pay 250 and pay the taxes related to the property it helps your base and he or she probably doesn’t need much as far as schools or other things they are paying for.

  19. Hank says:

    The problem is governments will not cut back. Employees that pay only 10% of their medical, while others have none, or pay 50% and more… People want to get reelected so to do that they need to spend your money to buy your vote. Especially in small towns. One town , Henderson has already over rode the 2 percent tax cap without even having a budget in place for 2014. That makes a lot of sense, as does the 4 copiers the town recently bought, the new building they are putting up, and the $3000 raise for the town assessor. So you can see why towns do not lower their budgets. you can mess with this and that, but if a government will not lower its budget or make employees pay more for medical, then nothing is changed.

  20. dan3583 says:

    Jim pretty much clarified what I meant to say. I do think some of our larger NNY farmers have paid more than property was really worth, but that’s anecdotal, I guess.

  21. mervel says:

    In general in the United States prices for all productive land has increased due to the large increases in commodity prices. The commodity price increases however have not helped the dairy industry as those commodities are also a factor of production.

    The future of food and agriculture from an investment point of view is positive, I don’t know how that translates to north country property values; however around the country farmers have seen really large increases in property values over the past 2 years.

  22. Rancid Crabtree says:

    As a farmer, I’m in favor of the 2% cap. As a landowner and taxpayer I’m in favor of everyone getting the same 2% cap! As a citizen of NY I’m in favor of drastically reduced spending by the County, State and Federal governments. They spend too much, we are forced to pay too much, simple as that.

    BTW- farmers pay sales tax the same as anyone else for non business related items and get the same breaks for business related items as anyone else.

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