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Column: Farm Tax Break May Wither

Senate committee approves a bill requiring greater sales to qualify for farmland assessment.

It may finally get a little harder for property owners to get a huge tax break for selling a few hundred dollars in Jersey tomatoes or stacks of firewood cut from their land.

Last Thursday, the Senate environment committee released a bill doubling the amount of income a landowner would have to get from his property to be eligible for the preferential farmland assessment. That’s only the first step in what could be a long road to enactment for the measure.

It’s unclear how many people would be impacted by the change because the state does not keep good records for the program.

An analysis of the state’s property database shows that almost 29,000 acres of land in Morris County are farmland assessed and the average assessment is $425, generating about $10 an acre in taxes. That’s a phenomenal discount in a wealthy, high cost county.

There are great benefits to the program. It keeps land open, which helps maintain lower levels of pollution and congestion, not to mention that open space is aesthetically pleasing. It also helps keep the garden in the Garden State and keeps farmers, some of whom struggle mightily to make ends meet, in business.

The law was enacted in 1964 to stem the loss of farm acres and help keep farming viable as the state got more developed and more congested.

There have been some tweaks, but the main regulations have not kept up with inflation in the intervening 48 years: A landowner still must have at least 5 acres devoted to farming or forestry and the sale of goods produced must total just $500.

The inflation rate over that time has risen more than sixfold, meaning that had it kept pace with inflation, that $500 threshold today would equal $3,711.

The legislation that cleared committee last week only seeks to double the threshold to $1,000 worth of vegetables or flowers or stacks of wood to continue to get the favorable low assessment.

That seems more than fair, particularly given that every $1 of tax break received by someone in the farmland assessment program must be made up by those who don’t own 5 acres that can generate income.

Should the bill pass and be signed by Gov. Chris Christie, it could potentially have the greatest impact in Washington Township.

According to the state database, more than 10,000 acres of land in the township are farmland assessed at an average value of $437 an acre. In 2010, those acres generated a total $103,000 in property taxes or about $10.20 per acre.

Consider that there were six 1-acre vacant, non-farm properties in the township last year with an average assessment was $54,883. They paid an average of $1,271 in taxes.

It’s no wonder that anyone with 5 acres tries to qualify for farmland assessment. And it’s not just people who benefit, but some companies, as well. Lincoln Park Airport, Ilac Realty and Hercules all own land assessed at low farm values.

Other municipalities have large chunks of farmland, including Chester Township, with 3,074 acres, and Mendham Township, with 1,437. Even well-developed Parsippany, at the intersections of Routes 80 and 287, had five farmland acres last year. Only one quarter of the county’s municipalities had no farm-assessed land.

The New Jersey Farm Bureau supports amending the law but wants to make sure that true farmers still get a preferential assessment so they can continue to make a living off the land.

That shouldn’t be a problem, given the $1,000 threshold would still be an even better deal than $500 was back when the program was enacted.

And making the program fairer would also be a good deal for land owners who might have to shoulder even a little less of the burden of other properties that are not paying their full weight of the state’s high property taxes. 

Colleen O'Dea is a writer, editor, researcher, data analyst, web page designer and mapper with almost three decades in the news business. Her column appears Mondays.

This post is shared by several Patch sites serving communities in Morris and Sussex counties. Responses below may be by readers of any of those sites.

Gadfly May 21, 2012 at 11:19 PM
The real solution is not to increase the income requirement, but to make the program only available to "real" farmers. For years some people have suggested that the program should only be available to people that make some minimum percent of their income from agricultural activities.
Carolyn Hanington May 22, 2012 at 07:31 PM
Jeff, you are right on the money. I would love our "real" farmers to have the program but homeowners should not be able to receive the break...it's not hard to tell the difference! Also, have had someone actually tell me that they have their brother write them a check for $500, he cashes it and gives the money right back! Outrageous..this issue has bugged me for a long time!
Dan Grant May 22, 2012 at 08:41 PM
All the comments are true. It is a loophole that developers use to avoid large tax bills but it means that the developer will have a greater need to develope if a large tax is placed on the property. The devil is in the details. Right now a parcel that had been farm assessed and is now being developed only pay a 3 year penalty tax when the property is subdivided and developed. That isn't nearly long enough. A longer penalty period that grows for these "gentleman" farmers is the answer not a $500.00 increase in sales of produce or wood.
Cara DePalma May 24, 2012 at 02:19 PM
If it benefits the wealthy I anticipate a quick veto from Governor Christie. It would be considered a tax increase and G-d forbid we do anything to close the revenue gap in NJ...
Mikey May 24, 2012 at 03:38 PM
"... it keeps land open ..." - yeah, so Buffy and Todd can play croquet without listening to the traffic noise of the riff-raff on their way to work. This tax cut should be for actual, working farms only, or just cancel the whole thing.

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