High property taxes are pretty much a fact of life here in New York. But as we report this week, a group particularly important to our collective wellbeing feel singled out when it comes to the tax man.
The New York Farm Bureau is calling for a cap on the year-to-year hike in agricultural land assessments, saying runaway values have hit farmers hard in recent years.
This is a poignant topic as we enter the summer season and families look to add fresh, in-season and local food to their diets. The concept of “eating local” has gained considerable traction among mainstream Americans, and the proliferation of farmers markets all over the area suggests it has staying power.
For this reason alone, we should be cognizant of what it takes to run a farm here in New York. According to the Farm Bureau, farmers here pay $38.41 per acre in property taxes, which amounts to about 15 percent of a farm’s net income. New York’s tax rate is second only to California (we bet this comes as no huge surprise).
Lowering the current assessment cap from 10 percent to 2 percent would not affect the rate at which farmers are taxed, but instead prevent the value of their land from being hiked so high year after year, which in turn results in a larger tax bill. It’s an idea that would provide relief to New York’s farmers, who have to compete with products grown hundreds and thousands of miles away under much more favorable business conditions.
But it’s a stop-gap measure. What is needed is an examination of the assessment system itself.
Farmland is assessed under a complicated formula that in theory sets an assessment based on the quality of the soil (there are 20 different soil groups). Using a number of data points provided by the U.S. Department of Agriculture, the state Department of Taxation and Finance sets a base agricultural assessment value, which is defined as “the average capitalized value of production per acre for the eight-year period ending in the second year preceding the year for which the agricultural assessment values are certified.”