|
| |
|
| |
|
|
|
July 11, 2004Bill would slash taxesFarmers could pay $5 per acreByRecord-Eagle staff writer TRAVERSE CITY - Farmers’ property taxes could drop to $5 an acre in 2006 under a bill sponsored by state Rep. Howard Walker, R-Traverse City. House Bill 5030 recently passed the House of Representatives 106-1 and Senate leaders plan a hearing on it in the fall. “Having overpaid our taxes for decades, maybe it’s time we get a little back,” Josh Wunsch, a Peninsula Township farmer, said. “This will make a whale of a difference in highly taxed fruit land surrounding Traverse City.” Under state law, property is assessed at its highest possible use, which for some farmland tends to be residential or commercial. The bill allows farmers to contract to keep their land in agriculture production for 20 years. Farmers would pay their regular property taxes locally, then obtain a credit on their state income or single business taxes. “Under this bill, you’re not taking a big chunk of your annual income and handing it over because someday someone might want to build a Kmart on it,” Wunsch said. Once fully implemented the bill could cost the financially strapped state $30 million a year, which is why it won’t start until 2006, Walker said. Governor Jennifer Granholm’s spokeswoman, Liz Boyd, said the administration likes the concept but has some concerns, including the price tag. Scott Everett, regional director for the American Farmland Trust, worked on the original bill that spread the cost among townships, counties, and the state. “I think now there are some significant challenges in this becoming law with the funding burden solely on the state,” Everett said. Walker said the price is small, about 5 percent of what the state spends on other industries. Unlike the state’s existing Farmland and Open Space Preservation Act, the tax credit in House Bill 5030 is not tied to income so it’s a guaranteed payment to preserve farmland, said bill supporter Rob Anderson, legislative counsel for the Michigan Farm Bureau. The Michigan Land Use Institute, which had opposed similar proposals, supported HB 5030. “Before, the tax benefits would go to land speculators,” said Jim Lively, a planner with the land institute. “They would take a tax break until they were ready to develop it, and there would be no penalty when they did.” Under the bill, farmers can’t get out of the contract for the first 10 years. They can buy out at 10 years by paying 7 percent of the property’s true cash value. At 15 years the buyout drops to 5 percent. “It’s hard to know, but we think that will be enough to dissuade land speculators,” Lively said. Melinda Lautner, whose family farms 360 acres in Leelanau County, said the penalties will stop farmers from enrolling. After the 20-year contract is up farmers have to agree to another 10 years without taking the tax credit, or pay back 10 years of tax credits plus interest. “That’s a 30-year commitment,” Lautner said. “That’s asking a lot of a farmer.” Funds from the buyouts and penalties would go into the state’s purchase of development rights program.
|
|
