More than 40 years ago, the Legislature enacted a constitutional amendment specifying that farm and agricultural lands should be valued differently from other land, “because it is in the best interest of the state to maintain, preserve, conserve and otherwise continue in existence adequate open space lands for the production of food ...” according to the resulting law.
The 53rd Amendment essentially declares that agriculture is the highest and best use of land being farmed. It rewards farmers by lowering the property tax rate on farmland, directing it to be assessed on its “current use,” rather than at fair market value.
Lawmakers created this financial incentive to keep farmers farming, at a time when agricultural lands were rapidly being lost to development. That’s true today, as it was in 1968.
But times have changed in other ways, and House Bill 1437 would update the law to recognize the growing local food movement and support the continued viability of small farms.
Co-sponsored by South Sound legislators Rep. Chris Reykdal and Rep. Kathy Haigh, the bill – which is receiving strong bipartisan support – would wisely extend all the favorable tax treatments to small and very small farms.
This important change will help small farmers stay in business, and will keep farmland affordable for new farmers, both young growers and those seeking new careers.
The original law divided farmers into two classes based on size: large farms with 20 acres and more, and smaller farms. All the land on large farms, including the farmer’s residence, received the preferential tax treatment. But a one-acre box was drawn around the residences of small farmers and taxed at fair market value.
State lawmakers designed the law to prevent abuse by those who might claim the lower property tax rate, but were not genuinely farming. It was an appropriate caveat at the time, but did not envision the economic pressures it would place on today’s small farms, which are located in urbanizing areas and along transportation corridors.
Small farmers in 2013 often grow, process and distribute food on fewer than 5 acres, and sell at farmers markets or local stores and restaurants, and often donate portions of their fresh products to local food banks.
Extending the tax advantage to small farms will allow them to go hoe-to-hoe with larger farms, and provide affordable products being sought by the local food community.
The original version of House Bill 1437 applied the changes statewide. But to achieve broad bipartisan support – it moved out of the House Finance Committee on a 12-to-1 vote – it was amended to apply the home site tax treatment to a pilot project only in Thurston County.
That’s unfortunate, because small farms all over the state are under economic pressure to survive, and they are growing in importance to their surrounding communities.
We would have preferred the Legislature proactively fixed a 45-year-old law that doesn’t reflect today’s farming environment, rather than a delay that puts more small farmers at risk.
We’re confident, however, that the Joint Legislative Audit and Review Committee assigned to evaluate the effects of the bill will identify its positive impact and recommend expansion to the other 38 counties next year.