package could have
huge implications for
farmland taxes
Jan Shepel
Associate Editor
MADISON
The state’s two largest farm organizations are upset about a tiny provision inserted into the state budget that could have huge ramifications for farmland taxes.
Both the Wisconsin Farm Bureau and Wisconsin Farmers Union are asking state lawmakers to resist making any changes in the definition of agricultural land for property tax purposes.
State senators apparently inserted language in their budget package changing the definition of ag land because they believe developers are avoiding taxes by allowing land to be farmed, which is then eligible for use-value assessment. The Senate’s proposed change would not allow any land to be called “agricultural land” that has been platted or zoned for residential, commercial or industrial use.
With that change it could no longer be eligible for use-value assessment. “I don’t think people appreciate how bad this can be,” said Paul Zimmerman, executive director public affairs for Wisconsin Farm Bureau.
Wisconsin Farmers Union President Sue Beitlich on Tuesday, June 23, said the budget provision might be “well intentioned” as a way to collect taxes from developers who are “avoiding their tax liabilities” but said it isn’t a simple issue.
“With Wisconsin’s farmers facing unprecedented economic hardships, now is not the time to be increasing their property taxes,” said Beitlich. “Farmers will be taxed off their land in the process.”
The whole concept of use-value assessment was to base farmland taxes on how the land is used, but the Senate’s proposed change would base taxes on zoning decisions. According to the Farmers Union, there is an estimated 750,000 acres of state farmland (out of almost 12 million acres) that is not zoned “agricultural.”
While some developers may be using use-value assessment into a property tax loophole, Beitlich said, “changing the definition of agricultural land does far more harm than good.”
The Wisconsin Farm Bureau is mounting a full-frontal attack on the provision, pleading with farmers to call their lawmakers and the governor’s office to ask that it be taken out of the budget.
The Farm Bureau’s Zimmerman said he wasn’t sure how to quantify the number of farm acres this could affect, but said there are whole townships in some rural counties that are zoned residential and farmers there would feel the impact if this change survived the budget process.
When they discovered the offending item in the Senate budget, Zimmerman said they thought it might affect only the farmland that is located within city and village limits — about 250,000 acres according to Department of Revenue information from 2006. But when they realized it would affect any farmland that town or county governments have designated “rural residential” they knew it would hit many more acres and farmers.
One Farm Bureau member — a dairy farmer near Green Bay — has several hundred acres of farmland that is zoned residential and would see his taxes rise from $3.50 per acre to $85 for a tremendous jump in his total property tax liability.
After a rough calculation and some assumptions about land that could be impacted — 5 to 10 percent — Zimmerman believes farmers could be on the hook for $40 million to $80 million in higher property taxes as a result of the proposal.
“That would be a shock wave sent into farmers in the state of Wisconsin,” Zimmerman said.
Bill Bruins, a Waupun dairy farmer and president of Wisconsin Farm Bureau, said the change could give town boards and county boards the power to take away use-value from farmers just by changing zoning. “Zoning can occur without the consent of the landowner,” he noted.
In Trempealeau County, Zimmerman said, there are several townships that are zoned largely “rural residential” where 80 to 90 percent of the township is covered by this designation with minimum lot sizes. “This is not an urban area by any stretch of the imagination,” he said.
“We are asking and pleading with farmers to call or write their legislators. Use-value assessment is at stake here,” Zimmerman said.
“If this goes through it will neuter use-value,” Bruins said. “In a session where they are looking at the Working Lands Initiative, they are taking away what has head-and-shoulders been the best way we’ve had to preserve ag land.”
“What can be preserved by the Working Lands Initiative will be more than lost by this,” added Zimmerman. “And as draconian as it already is, it could get worse — livestock siting is based on agricultural zoning — it doesn’t have to apply to rural residential or residential.”
The kicker is that if the provision survives, most of the money wouldn’t go to the state to help fill its massive budget hole, but would end up with local schools, cities, villages and townships, Zimmerman said. “This does nothing to help the state budget,” he said.
In a letter to members of the Wisconsin Senate, Farm Bureau notes that this proposed change in the Senate budget package (it doesn’t appear in the Assembly version) would conflict with existing and new state policies to preserve the state’s agricultural lands.
Until now, any mention of farmland in the state budget has been about the Working Lands Initiative aimed at slowing the development of farmland. “Changing the definition of agricultural land is a drastic departure from that goal because it will immediately expedite the sale and development of farmland across Wisconsin,” the letter adds.
Besides forcing farmers to sell off their land, this provision also makes another legal challenge to use-value a distinct possibility with an outcome that could be devastating to agriculture in Wisconsin, Farm Bureau said.
“Farmland in Wisconsin should be taxed as farmland, regardless of zoning or platting,” the Farm Bureau letter said. The use-value system already contains a penalty for land that is converted to other uses and the new Working Lands Initiative also includes its own conversion fee for land diverted out of agricultural purposes, the farm group added.
They reminded lawmakers that the rural economy of Wisconsin is ailing and the provision comes “at a precarious time”, adding that property taxes shouldn’t be raised by an “unknown amount on an unknown number of acres to fix what some think is a glitch in a law that has proven to slow the conversion of farmland.”
