Eating local is a growing trend, but agricultural advocates are concerned spiraling land values are discouraging industry growth in the Empire State.
The New York Farm Bureau is lobbying state legislators to limit agricultural assessments to a maximum increase of 2 percent annually, which it claims mirrors the relief property owners received through the 2011 tax cap. The state Senate passed the bill at the end of May, but it needs to go through the Assembly before this year’s legislative session ends on Thursday, June 20.
The bureau is targeting land assessments, and not the tax rate itself. Assessments are calculated differently for agricultural land than residential and commercial property through a national formula. Agricultural assessments are currently capped at 10 percent statewide.
“We feel it is needed because we are seeing a large increase of 10 percent raises in assessment value every year and as the assessments go up, property taxes corresponding go up as well,” the New York Farm Bureau’s Steve Ammerman said. “It is to the point that our farmers have seen their property tax bills double over the last 10 years.”
Property taxes account for approximately 15 percent of the average farm’s net income in New York, which is 5 percent above the national average, according to Farm Credit East, a company providing loans and financial management services to farmers. The average property tax bill for a New York state farmer in 2007 was $5,544 and it increased to nearly $7,650 in 2011, almost $2,500 above the national average.
The average farm in the state is also smaller than the national average – 195 acres compared to 420 acres. The average state farmer pays $38.41 per acre in property taxes, according to Farm Credit East, which is above the national average of $12.34.
Barry Flansberg, assessor for the towns of Oakfield, Elba and Byron in Genesee County and the Town of Barre in Orleans County, said from 1990 to 2006 the average assessment for one soil type was around $550, but this year that same soil type is $1,000.
“From my professional perspective in an area that has a strong agricultural presence, farming has evolved and modernized since the 1970s, but the (agricultural) assessment system has not,” Flansberg said in a statement. “It is not reflective of what’s happening in the fields today and no longer is a reasonable and consistent system.”
Ammerman stressed the Farm Bureau isn’t advocating for farmers to pay lower taxes, but are seeking to minimize future tax increases.
“We think it is a matter of fairness to the farmer that pays more than their fair share in services,” Ammerman said. “It is going to get to the point where some farmers simply can’t stay on their land.”
Agricultural assessments are calculated through a formula accounting for the quality of the soil and national production value statistics. There are two main soil type categories, mineral soil and organic soil, with 20 classifications total. There is also a category for aquaculture and farm woodland.
This formula is what the Farm Bureau claims is leading to a rapid increase in agricultural assessments.
“Your average homeowner’s property taxes is not jumping 10 percent each year, it is for our farms,” Ammerman said.
Brian Wilson, owner of Wilson Farms in Knox, was more concerned about the state’s high taxes and pushed for a broader reform beyond a cap.
“They should lower the taxes first,” Wilson said. “The assessments definitely increase over time, and as your assessment goes up, your tax bill goes up.”
Wilson founded his farm with his father a decade ago and started off producing hay, but has expanded to vegetables and beef. His farm is around 400 acres and revenue is getting better each year as the soil improves.
For him, farming is a passion, but he “wouldn’t suggest anybody do it.”
Randy Grippin, owner Mountain Winds Farm in Berne, had a similar sentiment.
“Taxes are too damn high, period,” Grippin said. “Until they figure that out it is going to be tough for any farmer to keep on moving.”
Grippin grew up on a farm and started producing maple syrup around six years ago.
“Everything out there costs money and you got to build the infrastructure for any business until you get to the point where you can actually do anything,” he said.
Grippin said capping assessments at 2 percent increases “may help,” but he wondered if the state would look at other means to raise taxes if assessments were capped.
“It comes down to New York state just taxing us on everything,” he said.
Alexander Gordon, owner of Gordon Farms, Inc., in Knox, said capping assessments is an “important piece to close,” with the value of his land increasing at more than 2 percent annually.
“There is no firewall for the farmer,” Gordon said.