County wants people to stop farming, growing food

[terracore]

Obscured in the "vacation rentals" Real Property Tax Review Working Group BS:

"Changes are recommended, however, for the county’s agriculture program that gives breaks to active farms, ranches, nurseries and orchards. The changes, if approved by the council, would go into effect for the 2021 tax year, at the earliest.

A suggested change likely to have the greatest impact is the requirement for a minimum size parcel for those taking the non-dedicated agriculture property valuation benefit. The change would add about $6.5 million to county taxes annually by affecting 3,000 of the 8,400 parcels currently in the program. The affected parcels now pay about $580,000 in taxes.

“We realize these changes are substantial, however, the agricultural programs should provide considerable incentive to farm production at a community level and go beyond a personal sustainable level,” the report states.

Property Tax Administrator Lisa Miura couldn’t be reached for comment by press-time Thursday.

Changes are also recommended for the dedicated agriculture program, where a property owner agrees to stay in the program for 10 years in exchange for a much lower property valuation, thus leading to lower taxes. The working group’s agriculture subcommittee recommends the county add a three-year dedicated program as well, for start-up operations or where there is uncertainty with respect to the long-term viability of a commercial agricultural program.

Currently there is no minimum lot size for the non-dedicated program, while those in the dedicated program must have at least one-quarter acre for intensive agriculture, 1 acre for orchards, 5 acres for feed crops and 10 acres for pasture.

In addition, in order to qualify for the program, a farm plan would be required to ensure there is a viable agricultural activity being undertaken. The property value would be calculated at 30% of the fair market value of the property.

The suggested changes are in response to the increasing gentrification of rural areas of the county and the perception of abuse in a program that was created to support commercial agriculture and encourage agricultural uses in rural areas.

This is the final report for the working group and the agriculture committee, which held about two dozen meetings each over the past two years."

https://www.westhawaiitoday.com/2019/11/...n-rentals/

[dan d]

Oh boy


HPP

[kalakoa]

About time. Fake ag dedication is stealing money from the budget. County can start with the huge Shipman lands taxed at "pasture" rate, I don't see any grazing going on there.

[HereOnThePrimalEdge]

Fake ag dedication

If I understand the designation correctly, dedicated ag requires a 10 year commitment for production of an agricultural commodity. The land cannot be subdivided during that time, and it maintains and encourages large areas of non-residential land on the island.

Non-dedicated ag land is a three year commitment, which doesn't prevent farm land from subdivision for long. As with dedicated ag, proof of production and sales must be submitted for approval.

I wonder how many farmers can start their business, put in the necessary improvements (water, fencing, sheds to lock up tools), grow a crop or raise livestock, and find a market for their product in three years? Perhaps if a farmer is already in business on another parcel and he's using a non-dedicated parcel as a temporary expansion for his existing business?

As kalakoa pointed out, it might be a beneficial change for the average taxpayer if the rules were strengthened and enforced. As the rule exists now, we can look over thousands of acres of non-farm "farmland" in East Hawaii and ask, "where's the beef?"

[kalakoa]

if the rules were strengthened and enforced

Isn't it ironic that County is able to use aerial photos to detect "unpermitted" construction which can be valuated for taxation ... but they're completely unable to use the same (and already existing) photos to determine whether "agriculture" is happening on a given parcel?

They're quick to point out that they "don't have enough staff" to validate every ag exemption claim...

How about: instead of site visits, require farmers to open their books? They're paying GET on their production...

[Chunkster]

While I don't doubt that there are people unfairly getting ag exemptions on their land, my cynical side says that the county is more interested in revenue than fairness. I'm also quite certain that any increased revenue will go toward hiring more of the "right people" to be county employees as opposed to any material improvement for the citizens.

[terracore]

If a person is residing on the property and claiming the homeowner's exemption, that is generally greater than the AG exemption is worth and you can only get one or the other, so this change is not geared towards people keeping a few alpacas as pets to avoid paying property taxes on their home.

My problem is with the requirements. Who approves this "farm plan"? Is it like the solar hot water waivers that the county stopped issuing? Or how about a CW permit application that will never get approved?

[kalakoa]

Who approves this "farm plan"?

Better question might be: "for whom are these plans approved"?

Favorite example: a vacant lot for sale above Hilo with a full Ag exemption. Aerial photos showed no ag. I drove by, and guess what, vacant house, overgrown yard.

Benefit of the doubt: it might have been productive ag at some point ... but apparently nobody ever reviews these exemptions after they're granted.

Yes, we all know the revenue enhancements will not be used for our benefit -- that's a given -- but fixing bogus ag exemptions means increasing taxes on people other than myself, and that's as good as it gets around here.

I can hardly wait until County decides to rescind Homeowner status for unpermitted residentce. That tax grab will make bogus ag exemptions look like pocket change, and there's no recourse, it's merely a "clarification of existing rules" (for everyone).

[HereOnThePrimalEdge]

"for whom are these plans approved"?

I recently looked at an 8 acre parcel that was for sale. Along one border was a row of coconut trees. The land had been approved as a coconut farm, but a few years ago the County asked for records, and no coconuts had ever been sold.

The ag designation was rescinded, so the owner put the property on the market after taxes increased - - exponentially.

Does she or doesn’t she, receive a good return on a real estate investment with the added benefit of minimal taxes over a 15 year period? Only her accountant knows for sure.