Break for Agriculture Land
Before making recommendations, the Senate Ag Task Force, hosted meetings last year with farmers across the state to see how to better serve the industry.
“Right now farmland is assessed on the highest and best use of that property, which means if there is going to be potential development, even if it’s 20 years down the road, the farmland can be taxed at that value,” explained Tim Goodrich, Michigan Farm Bureau legislative counsel. “So what we want to do is change the Constitution to allow farmland, currently being used as farmland, to be taxed at its current use.”
It will take two-thirds of the Senate and two-thirds of the Michigan House to get the issue on the November ballot. “We got a good jump start with the governor indicating his full support for this effort,” Goodrich said.
This proposed change in the Constitution would not only help keep money in the pockets of farmers and help the ag economy, as Goodrich sees it, but it also offers a farmland preservation component.
“In some instances, farmers sell out because taxes are too high,” Goodrich explained. “This will help encourage them to keep it in production agriculture. If they do decide to sell for development purposes, and that land is developed under the constitutional proposal, there will be a conversion value (or fee) added at the point of sale.”
The conversion fee pumps dollars into a state farmland preservation fund, where it can be used by the state to match local funds to purchase development rights.
“You’d have a local component and state matching dollars,” Goodrich said. “We believe that if this proposal gets on the ballot and passes, this may be one of the most aggressive and progressive farmland preservation programs in the country.”
In addition to the use-value assessment proposal, Engler proposed another billion dollars for roads. “Michigan Farm Bureau was a major proponent of the gas tax increase that passed a couple of years ago, and we are vigilant in trying to ensure those dollars go to the appropriate road authorities,” Goodrich said. “We are very encouraged with the governor’s proposal. However, we will continue to support the current formula of Public Act 51, which is the transportation formula. P.A. 51 ensures that local roads, which are very important to production agriculture, get their fair share of road funding.”
While they didn’t get mention during the State of the State address, Goodrich says the governor has supported two other key agricultural issues this year – the drain code and elimination of the so-called “pop-up tax.”
“When a farm is transferred to the next generation, there is an uncapping and a pop-up in the tax assessment,” Goodrich said. “He did not mention it, but we know he supports removing it from the bill, and we will be working on that issue. It passed the Senate last fall, and we’ll be looking for passage this spring and getting it to the governor.”
The drain code has already passed the House and will likely be taken up by the Senate this spring. “We’ll be looking for passage this spring in the Senate and believe the governor will support it, as well,” Goodrich said. “We know the governor has several other issues he supports for production agriculture and look forward to his attendance at our Lansing Legislative Seminar on Feb. 15 for more detail on those issues.”
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