hearts and minds

August 6, 2006

Saving the Farm – With Use Value Assessment

Mathias and Anna Maria, born in the late 1700’s, and their son and his wife homesteaded their Cedarburg farm in 1848, and a farm it’s been ever since. They were my great, great, great grandparents, and we live in the log cabin hand built by them and cared for and modified by their descendants, right down to my parents who were able to retain the farm in family ownership.

Wisconsin farmland is unique. It’s not like some Nebraska farmland where the corn fields stretch for miles in every direction. Much of this land was worked 10,000 years ago by a mile thick ice sheet. The predominant terrain is glacial till with bedrock outcrops. The topography is moraine, kettle, drumlin and esker, with isolated wetlands and complex drainage. The driftless areas of southwestern Wisconsin are likewise no piece of cake to farm. Farmland has always been valued lower here than in the monotonous flatlands because less land is cultivable, and the farming, whatever type is undertaken, is a little more challenging and a little less rewarding per acre. But it’s a beautiful, rich land, and if you can figure out how to work with it, you can make an honest living off of it, generation after generation. It’s worth pointing out that studies in Wisconsin and nationwide show that farms, in contrast to other land users, pay more in property taxes than they receive in services from the taxing authorities.

In 1996 the Wisconsin farm use-value tax assessment law was enacted. Full implementation occurred last year. The law requires land used for farming to be assessed for its economic value as farmland, prescribes formulas for determining that value, and defines penalties for land taken out of farm use. The intent of the law was to prevent the wholesale and accelerating loss of family farms due to farms being taxed for their supposed potential value as subdivisions, shopping malls, and industrial parks. Over forty states have statutes similar to the Wisconsin law.

The use value law is being interpreted to discriminate between land on each farm that is actually being used for farming, and land which the assessor feels is not. So a wet spot or a pothole in the middle of a field is considered to be “land not used for farming”. A wood-lot of mature native trees, with a rich, varied under-story of native flowers and saplings, that continues for centuries to provide a renewable supply of lumber, fenceposts and stovewood, not to mention valuable wildlife habitat and oxygen for all to breathe, is “land not used for farming”. Hedgerows, windbreaks and fence lines are not plowed and therefore declared “not used for farming”. Buffer strips to prevent cropland erosion into streams and farm ditches, if initiated voluntarily before bureaucrats thought of the idea, and therefore not eligible for government subsidies, are also declared “land not used for farming” and therefore excluded from use value assessment. However, identical buffer strips that are paid initial and annual cash incentives by federal and state taxpayers are declared “land used for farming” and thus protected by the law from sky-rocketing assessments. What an absurd injustice! A field left fallow on a farm for a year because of a farmer’s cropping plan or health circumstances is re-assessed at “market value”. But a developer’s fallow land that’s enrolled in a subsidized government program continues to be classified as “land used for farming” until the scrapers and dozers appear. Places on a farm labeled “not used for farming” are not being protected by the use value law, and sometimes assessors, local government officials, and those who want to pry the farms out of the hands of the farmers, stung by their inability to tax farmland for it’s economic “value” as a theme park or a subdivision, and their failure to defeat the law on it’s merits, have seized on these marginal portions of any farm in Wisconsin and have increased both classifications and assessments of these features. Welcome, Alice, to 21st century Wonderland, where swamps, outcrops and land unsuited for ruminant pasture have become the most valuable and highly taxed land on the farm. And raw milk today is priced lower than anytime in the last 20 years.

Our farm contains about 130 acres (not including one facility which would confuse this discussion). Before the use value law, we were assessed on over 100 acres of land classified agricultural. It didn’t matter then that less than that was being actually plowed and pastured. It was declared “tillable” and “pasture” and that’s how it was assessed, period. (In those days, swamp and woods were valued much lower than tillable and pasture acreage.) Now in 2003, with full implementation of use value on the 130 acres, we have less than 60 acres classified agricultural, although we actively use much more than that. Before use-value law was enacted, we had swamp and a wood-lot assessed at a total value of $13,500. Now we are being assessed $111,000 for supposedly three times as much swamp, waste and woods. Our swamp and forest assessment has been multiplied by a factor of eight …on the same unaltered farm! With two intermittent streams and farm ditches running across the farm, numerous springs, (and wide buffer strips established…shame on us!…before and without federal and state incentive and maintenance payments and therefore not satisfying the assessor as “land in agricultural use”), a lot of our farm is devoted to drainage and erosion control that is now valued by the assessor at up to 14 times the use value of the tillable fields. Overall, the ‘swamp, waste and woods’ is now “worth” eight and a half times the use value of our cultivated fields. That is insane and illustrates how farmland continues to be rapidly taxed out of existence. The assessment on our farmset footprint was increased 167% and the improvements increased 80% since use-value was passed, though the farmset is unchanged except for being older and the footprint being smaller due to increased cultivation. In 2003 the total assessment of our UNCHANGED family-owned farm shot up to over 2 1/2 times the previous year’s value. Meanwhile, according to the assessor, total town assessed valuation since the last assessment increased only 45%, and that INCLUDED the valuation of new developments.

As on many farms, the windbreaks, potholes, fence-lines, intermittent stream-beds, swamp and wood lot have no road access and cannot be parceled and sold for development by themselves. These features are inextricably linked and integral to the plowed fields and the other farm operations. The only way the ‘market value’ assigned by the assessor to these strips and spots of drainage, swamp, windbreak and rock outcrop can ever finally be realized is to cease farm operations forever, sell the farm and ‘develop’ the crop and pasture land. We’ve all seen the difference between a natural stream and wetland versus a suburban ditch and mitigation/retention pond, and we’ve seen the brush piles and log trucks when a woodland gets ‘developed’. That’s how you get the ‘market value’ out of the swamp, waste and forest that embraces the plowed fields.

According to the Wisconsin Farm Bureau, from 1996 to 2000, after use-value introduction, swampland assessment increased 400% statewide and forest-land assessment increased by 119%, while residential assessment increased 35%. A farm that has 180 acres, on every square foot of which grows nothing but corn or potatoes for a few months a year, is admirably protected by use-value law. But the farm of 360 acres, 180 in row crops and the rest consisting of wetlands, forest, streams and springs and voluntary buffers, will be on the block as soon as development pressures intensify. This may be good for developers, but it’s bad for family farms and the environment. Administrative regulations and assessment practices are defeating the intent of the use value law. Farmland that is now being classified swamp, waste and forest is integral to, inseparable from, and even directly employed in farm operations. The entire farm should be protected by use value as long as it’s part of a continuing farm operation. No “unused” swamp, waste or woods on farmland parcels should ever be assessed higher than the value of the tillable acreage there.

Be sure to click on this link and take a look at more recent articles with updated information on this very subject.

June, 2003

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