Jan 29 Green Acres Fight Heating Up

Thursday, I got a special e-letter update from Rep. Gottwalt on the subject of the Green Acres property tax meetings. To say that the new legislation enacted during the 2008 session is a screwed up mess is understatement. Here's the most important part of the statement that the State of Minnesota sent out to farmers enrolled in the Green Acres program:

Saint Paul - The Minnesota Department of Revenue is alerting taxpayers of changes the 2008 Tax Bill made to the Green Acres property tax law. These changes will affect property taxes only if a persons' property is currently enrolled in the Green Acres program or will be enrolled in the future.

Non-productive acres such as sloughs, woodlands and wetlands that are not used for agricultural production will no longer be eligible for the reduced agricultural valuation and property tax deferment provided by Green Acres. Specifically, this legislation changes the number of payback years for parcels, or portions of parcels, that will no longer qualify for Green Acres because they are non-productive acres. In addition, property that is enrolled in CRP, RIM, or other conservation programs will no longer be eligible for Green Acres.

Only acres used for actual agricultural production will be eligible for Green Acres for all applications filed with the county assessor after May 1, 2008. Those enrolled in the program prior to May 1, 2008 may remain enrolled for subsequent assessment years until they are sold, withdrawn or no longer qualify, although these existing properties will be subject to the new payback requirements.

The legisature's decision to change taxation rates will hurt Minnesota's farmers and Minnesota's environment. If people thought it through first, I'd bet that few people would think it's wise to tax woodlots at the same rate as a city lot. Under the legislation signed into law in 2008, a farmer would have a greater incentive to cut down the woodlot & plant it with crops than to preserve a valuable windbreak.

Here's the important portion of Rep. Gottwalt's e-letter:

Stearns County has held a series of meetings this week to explain recent changes in property taxes for agricultural land owners, including those impacted by Green Acres legislation. More than 160 people showed up for the meeting in Rockville, and a similar number at two meetings in Waite Park. The bottom line is, many agricultural land owners are steaming mad about huge increases in their property taxes, caused mostly by increased assessed values dictated by state and federal laws.

The fact that that many people attended a townhall meetings in the dead of winter tells you how intense the dissatisfaction is towards the modifications made to Green Acres in 2008. Legislators that don't repeal the changes made in the 2008 session should be retired this November, especially with legislators representing rural districts.

Let's ask a simple question about the change in tax rates. Does anyone think that "sloughs, woodlands and wetlands that aren't used for agricultural production" have the same value as a 5-acre city lot? Having spent many a weekend traipsing through "sloughs, woodlands and wetlands that aren't used for agricultural production" in the pursuit of ducks, geese and grouse, my answer is NOT A CHANCE!!! Though I loved those pursuits, there's no way I'd agree that those types of terrain are worth as much as a 5-acre city lot.

With one exception.

The minute that farmer initiates the process to turn his farmland into a development is the minute that the higher property taxes should kick in. That's the point that the land stops being rural farmland.

It's important to note that this change applies to places like Ronneby just as much as it applies to places like St. Augusta. The reason why that's important is simple. There isn't much development potential in a town like Ronneby. There's alot of development potential with St. Augusta. Considering the fact that it isn't nearly as likely that Ronneby will be developed as it is that St. Augusta will be developed, then it's important that we ask why "sloughs, woodlands and wetlands" in Ronneby should be taxed at the same rate as homes in the city.

Farmers shouldn't be penalized for not developing their farms. That's what's happening with farms under this tax system. That's why now's the time to fix 2008's mistakes ASAP.

Comments welcome at LFR.