Trenton— Legislation long-championed by Senator Jennifer Beck (R- Monmouth) and Senate President Steve Sweeney (D- Gloucester/Cumberland/Salem) to prevent abuse of the state’s farmland assessment law has cleared the final hurdle to passage by the full Senate. The Legislation, S-589, was approved the Senate Budget and Appropriations Committee.
“The current threshold of $500 in agricultural sales set forth in New Jersey’s farmland assessment law has not been increased since its inception and is easily abused,” said Beck. “This bill modernizes the law to better ensure that only those who actively work the land receive the 98% property tax break on their property.”
“Clearly this program is being taken advantage of and it’s the taxpayers who ultimately lose the most. It’s long past time we update the farmland assessment law. This protects both real farmers and the taxpayers of New Jersey, ” said Sweeney.
The bill would boost the threshold of sales derived from farming activity to $1000 per year from the current $500, and provide for a review of the sales threshold every three years. This number was selected based on a 2007 study by Rutgers which calculated how many farms would be disqualified at minimum revenue qualifications of $1000, $2500 and $10, 000. A $10, 000 was estimated to take 398, 093 of New Jersey`s approximately 982, 000 acres of farmland off the preservation rolls.
The legislation also would require program applicants to submit evidence of agricultural sales and/or income to the Department of Agriculture, and require tax assessors to undergo training in farmland assessment as a condition of licensure. Most importantly, the State Division of Taxation and State Board of Agriculture would issue guidelines to tax assessors to aid them in defining legitimate farming activity.
Abusers of the program would face a $5000 fine, in addition to restitution of all taxes inappropriately avoided on property fraudulently claimed under the assessment exemption and other penalties.
“There is something wrong when an individual can sell three cords of firewood to himself and claim the same tax break as farmers producing legitimate agricultural output,” Beck continued. “The abuse of this program is well documented in the press and by the State Auditor and needs to end.”
Posted: June 18th, 2012 | Author: admin | Filed under: Jennifer Beck, NJ State Legislature, Press Release, Stephen Sweeney | Tags: Fake Farms, Press Release, Senate President Steve Sweeney, Senator Jennifer Beck | 11 Comments »
The bill, S589, that Senator Jennifer Beck and Senate President Steve Sweeney have sponsored to address New Jersey’s “Fake Farms” will not close any fake farms and will not increase property tax revenues. It will create new bureaucracy on the state, county and municipal levels of government. It will increase the costs of municipalities evaluating what is a farm and what is not a farm.
New Jersey’s farmland assessment law dates back to 1964. It provides that properties of 5 acres that generate revenue and payments of $500 from crops or livestock be assessed as farms for property tax purposes. Properties over 5 acres must produce $5 per acre to qualify under the proposed law. $.50 per acre for wetlands. Dogs are excluded as livestock, President Obama’s childhood dietary habits notwithstanding.
S589, let’s call it “Karcher’s Law,” would increase the minimum level of revenue a “farm” must produce to $1000.
Beck used former Senator Ellen Karcher’s use of the farmland assessment law as a major issue in her 2007 campaign to replace Karcher in the Senate. Karcher classifies 6 acres of her 9 acre Marlboro home as a Christmas tree farm, saving $14,000 in property taxes.
I can see the campaign literature now. “We ended fake farms by doubling the required production of these so called farms.” Gullible homeowners will nod and be grateful that their property taxes increased only 3% while the lawyers, lobbyists, rock stars and politicians who avoid tens of thousands in property taxes send in their campaign contributions.
Products that cost $500 in 1964 would cost $3,711.05 today. 500 of today’s dollars would have bought you $67.37 of merchandise in 1964.
Clearly, increasing the required revenue generated from a “farm” from $500 to $1000 will not end the abuse. Increasing the required revenue to the inflation adjusted $3,711.05 will not end it either.
There is a provision in the proposed law that creates a State Farmland Evaluation Advisory Committee comprised of the Director of the Division of Taxation, the Dean of Rutgers College of Agriculture and the Secretary of Agriculture. The committee will conduct periodic reviews of the minimum farm revenue and payment requirements. Maybe Sweeney and Beck are counting on the bureaucrats to come up with an equitable solution to the problem. Not likely, but we can’t say for sure as neither Senator returned a call asking for an explanation of the bill.
There is another provision of the proposed bill that eliminates the “roll back tax” for fake farms that are declassified. Under the current farmland assessment law, properties that are declassified as farms are subject to retroactive property taxes at a fair market valuation for a number of years. The proposed law would only tax declassified farms at fair market value going forward, so long as the property owner continues their fake farming. Maybe this is the real intended teeth of the proposed bill. We’ll ask Beck or Sweeney if either of them calls back.
S589 was passed by the Senate Environment and Energy Committee on Thursday and sent to the Senate Budget and Appropriations Committee.
Hopefully the Senate Budget and Appropriation Committee, of which Beck is a member, will amend the bill so that it really does eliminate the practice of middle class homeowners subsidizing hobby farms of wealthy and connected landowners.
Posted: May 19th, 2012 | Author: Art Gallagher | Filed under: Jennifer Beck, Property Taxes, Stephen Sweeney | Tags: Ellen Karcher, Fake Farms, Farmland Assessment, Funny Farms, Jennifer Beck, Karcher's Law, Property Taxes, S589, Steve Sweeney | 8 Comments »