Niagara Gazette

September 3, 2013

CONFER: Ease the tax growth on farmers

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Niagara Gazette

Niagara Gazette — It has been written here before that property taxes are the most unfair of all the taxes. School, county, and town levies penalize people for accumulating wealth (their house and land) and for improving upon it (home improvements) while rewarding people who do neither (by having them pay less for access to the same local services).

That inequity is especially pronounced when it comes to agriculture. Farms throughout Upstate represent, by far, the largest taxpayers in rural communities; after all, farming is the most land-intensive business there is. Farming families use no more public services – like roads, fire protection and schools – than non-farming families, yet they end up paying tax bills that are multiples of what their neighbors pay.

The burden placed upon farmers is mammoth, even with help that they get in the form of special agricultural assessments, farm building exemptions, and school tax credits. When it comes to the final tax bill, New York farmers pay an average of $38.41 per farm acre.

That inequality on the home front creates major inequality in the marketplace. Know that just like manufacturers, farmers operate in a global economy – this isn’t roadside stand versus roadside stand. They are trying to get their produce, meat and milk into canneries, processors and stores throughout the world, as are farmers everywhere from Washington to Brazil. That’s why you see such a diversity of sources when looking at labels while grocery shopping.

Farmers have to first battle what Mother Nature throws at them and, then, when they are done, they have to battle for market share. Like with any product, it’s all based on what one can sell at a price the market can bear. Every penny is critical.

That’s why New York farmers take a beating.

The national average for taxes per farm acre is only $12.34. So, growers and dairymen in the Empire State are paying more than 3 times what their competition is paying in other states for their most important asset – land.

That’s more than significant. Comparing apples to apples, suppose a grower in New York tends to 1,000 acres of orchards. His tax bill would be $38,410. His out-of-state competitors of equal size would pay just $12,340. The New Yorker has to either pass the extra $26,070 on to customers (highly unlikely) or he has to settle for a lower profit (likely). Property taxes account for 15% of net income for our farms, while in Idaho they account for just 5%. By sporting larger profits at the end of the year, farmers in states like Idaho can buy more equipment, land and buildings and hire more people than those operating here. 

So, how do we make things better? It’s tough. Major agricultural tax reform is not on any state legislator’s radar, especially since the state and most municipalities are still suffering the effects of the Great Recession and can ill-afford even lower revenues.

But, a simple yet effective bill, one that doesn’t necessarily help the present, but helps the future, offers some hope to farmers who are used to their already-high taxes rising every year. It would put a reasonable cap on the growth in agricultural land assessments. Current state law maintains a 10% cap, but that cap – or a percentage very near it - has been met with regularity. The bill would institute a 2% cap on the assessments, mirroring the 2% tax cap that the state put on residential property taxes. By having assessment growth lowered significantly, farms will bear a lower share of taxes in coming years and it will give their owners a greater ability to plan for the future and more money to invest. 

Championed by the New York Farm Bureau, S.1952/A.165 passed both the Senate and Assembly and has been sitting on Governor Cuomo’s desk awaiting his signature. He now has the power to make it law and the power to maintain the status quo. New York’s farmers don’t deserve the latter nor does our region as a whole: Agriculture accounts for a $120 million-plus portion of Niagara County’s economy and a similar amount in Orleans County.

Gasport resident Bob Confer also writes for the New American magazine at TheNewAmerican.com. Follow him on Twitter @bobconfer