Rising agricultural land assessments have increased the tax burden on farmers statewide, even with a local property tax cap in place, but new legislation should slow that growth.
Gov. Andrew Cuomo signed legislation on Tuesday, Oct. 22, capping agricultural land assessments at 2 percent annually. The measure aims to offer a more stable and predictable tax climate for the state’s agricultural industry. Annual assessment increases were previously limited to 10 percent.
State officials said the base assessment value for agricultural lands has nearly doubled over the last seven years, which alongside increasing property taxes led Cuomo to petition and implement the “2 percent” tax cap.
Acting State Agriculture Commissioner James B. Bays said capping assessments would help agriculture remain a viable industry. It accounts for 25 percent of land usage statewide.
“Protecting our farmers from unsustainable tax hikes is part of our work to change our state’s reputation as the tax capital of the nation by controlling spending while reducing the tax burden on New Yorkers,” Cuomo said in a statement. “Agriculture is big business in New York, and our state government is committed to doing everything we can to help this vital industry thrive and continue to create jobs and economic prosperity, particularly Upstate.”
New York Farm Bureau President Dean Norton applauded the law and said it was a “victory for all farmers.”
“The 2 percent agricultural assessment cap has long been a priority for New York Farm Bureau,” Norton said in a statement. “It is a big step forward in reducing the increasing property tax burden that has limited our farmers’ ability to grow. It will also help young and beginning farmers as they endeavor to provide locally grown food, fuel and fiber.”
State Senator Cecilia Tkaczyk, a member of the Senate’s Agriculture Committee, said holding the line on agricultural taxes is important because the industry annually generates more than $31 billion.
“It will help small family farms to grow, invest in their farms and create new jobs,” Tkaczyk said.
New York Apple Association President Jim Allen said the cap would benefit apple growers operating more than 54,000 acres across the state.
Northeast Dairy Producers Association Board Director Dale Stein said without the cap, “costs will escalate to an unaffordable level for the farms and force many family farms out of business.”
Assessments of agricultural land are calculated differently when compared to residential and commercial property. It is influenced by a national formula.
Property taxes account for approximately 15 percent of the average farm’s net expenses in the 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.