Advocacy Alert: Support Small Farms

Summary of advocacy action items:

These two bills have hearings next week.  

SB 5327 will be heard at 10am on February 4th.

HB 1437 will be heard at 8am on February 6th.

The proposals allow small farms to seek current use taxation under their farm residence, on the same basis as large farms. Small farms are those under 20, and large farms are those 20 and over. This is a practical way to help small farmers stay competitive and farming, while sharing the impact across the community in which they live.

The current use program has proven to be an effective way to preserve farmland.

Small farms are the growing trend in farming in this state.

More details on the legislative requests:

Preserving Farmland – Supporting Small Farms

HB 1437 and SB 5327

Concerning small farms under the current use property tax program for farm and agricultural lands

The Current Use Property Tax Program Goal is to Preserve and Maintain Farmland

Under the Open Space Taxation Act, enacted in 1968 by the voters of Washington, qualifying farm land is taxed based on a “current use” valuation rather than the fair market value.  The tax difference is shared among all property owners in the county. The goal is to encourage the preservation of farm land by lowering property tax values.  This reduces property taxes and the cost of doing business.  And this helps farmers keep farming.

Both Small and Large Farms Participate in the Current Use Program

Land in the program is classified by acreage; for the purpose of this program, small farms are considered under 20 acres and large farms are 20 acres and over.  All enrollees must be engaged in commercial activities and are subject to examination by the County Assessor.

Small Farms Need the Same Tax Treatment as Large Farms

On a large farm, all of the land, including the land under the farm residence if it is integral to the farm operation, is taxed at current use.  This makes sense because this land contributes to the farm.   Yet, today small farms are taxed at fair market value on a one acre lot around their farmstead, no matter how the land is used. 

Taxing One Acre of a Small Farm at Fair Market Value Does Not Make Sense

·      Small farms are taxed at fair market value for a one acre lot around their farm residence; a one acre lot that does not exist and cannot be sold.

·      Taxes on this one acre are a financial burden to small farmers in our urbanizing areas, along our transportation corridors, and throughout the state. 

·      We are at risk of losing our small farms.

The Proposal – Both Large and Small Farms Should Be Eligible for Current Use Valuation on all Their Land

If the farm residence is integral to the farming operation then the land under the farm residence should be valued at current use, not fair market value. 

Fiscal Impact – Modest Shift and Loss – Important Community Investment in Preserving Farm Land

·      There will be a small shift of taxes to all taxpayers in the taxing district.  And some tax districts are at their rate limit so will experience losses.  

·      Today the taxes are borne just by the small farmers.  This proposal results in all of us sharing the burden.

Contact:  Leslie Cushman 360. 280.0087                             Nancy Laich 360. 866.9527

                 leslie.cushman.olympia@gmail.com                                    

    http://weneedsmallfarms.wordpress.com/                          

This table displays the estimated fiscal impact for each county.  The loss assumes the district will be at its rate maximum.  There is no loss to the state levy.  The estimate assumes full participation by small farms.

Data developed by DOR Research Division using 2012 statistics and data submitted to DOR by Assessors.

County	Average  Tax Increase for a $200,000 Home	County Tax Roll Today	Potential Loss of Revenue
Adams	$4.23	$19,958,990	$9,038
Asotin	$17.96	$18,035,584	$33,572
Benton	$1.64	$161,962,720	$2,055
Chelan	$2.94	$87,259,487	$2,595
Clallam	$3.91	$75,525,342	$11,662
Clark	$4.38	$498,569,080	$106,992
Columbia	$0.30 (30 cents)	$7,307,362	$29
Cowlitz	$0.64 (64 cents)	$104,515,501	$6,904
Douglas	$3.25	$39,159,858	$0
Ferry	$.09 (9 cents)	$5,475,785	$197
Franklin	$2.94	$64,498,212	$47
Garfield	$.98 (98 cents)	$2,659,440	$0
Grant	$.64 (64 cents)	$109,516,475	$7860
Grays Harbor	$2.04	$71,679,793	$805
Island	$.35 (35 cents)	$103,217,683	$3,000
Jefferson	$2.17	$46,241,892	$4,695
King	$.53 (53 cents)	$3,683,247,790	$116,030
Kitsap	$.61 (61 cents)	$303,546,536	$13,151
Kittitas	$7.30	$48,336,344	$22,009
Klickitat	$4.23	$30,027,159	$4,002
Lewis	$4.55	$76,280,221	$12,513
Lincoln	0	$13,169,010	$0
Mason	$1.66	$70,926,132	$997
Okanogan	$5.49	$37,884,826	$137
Pacific	$2.55	$32,131,847	$930
Pend Oreille	0	$11,232,807	$0
Pierce	$1.65	$1,047,660,247	$95,301
San Juan	$1.03	$43,249,773	$0
Skagit	$9.51	$159,011,633	$18,208
Skamania	$2.88	$11,705,931	$2,139
Snohomish	$1.64	$960,391,584	$85,283
Spokane	$1.72	$490,066,578	$31,326
Stevens	$1.74	$33,384,208	$148
Thurston	$1.39	$314,784,767	$7,442
Wahkiakum	$4.96	$3,945,472	$3,075
Walla Walla	$17.43	$60,549,881	$28,740
Whatcom	$5.27	$242,869,976	$22,248
Whitman	0	$36,874,001	$0
Yakima	$5.72	$174,424,174	$49,672