GUEST POST BY TONY JONES
(Jones lives on the plateau being developed by Skyline Development and heads up the “Save The Plateau” group.)
The Idaho tax code is designed to encourage farming and ranching, most notably via property tax agricultural exemptions.
Basically, the agricultural exemption creates a formula whereby farmers and ranchers are taxed on the earning potential of their property based on use, rather than on the true VALUE of the land if used for purposes such as subdivisions.
The exemption can be valuable. For a person with a $150,000 house, property taxes will be in the $2,000 range.
For a developer with an agricultural exemption on an $8-10 million pasture about ready to assorted residences, taxes may be as low as $400.
The idea of the exemption is to keep prime agricultural land in use turning out cattle and row crops rather than row houses. The only hook is that, to qualify for the exemption, the landowner has to raise crops or cattle…unless they live in Ada County.
Since the 1800s, people have tried, and generally failed, to raise horses and cattle on Hammer Flat above Lucky Peak Dam. They all appropriately received agricultural exemptions on the property.
In 2002 or 2003, the most recent owner quit running cattle on the property. At that time, Hammer Flat was valued at about $2,000,000.
If taxed at the same rate as other owners of bare, non-agricultural ground in the county, the tax bill would have been about $20,000. However, the assessor didn’t check to see if the land was still being used for agricultural purposes.
With the agricultural exemption in place the owner only paid a few hundred dollars in property taxes. The owner received a $19,000+ gift from other Ada County residents courtesy of Bob McQuade.
In early 2005, with the announced intent of constructing a “planned community,” Skyline Development acquired the property. Not known for their ranching activities, it was no surprise when, for at least the third year in a row, no cattle appeared on the plateau.
However, cattle or no cattle, the Ada County Assessor dutifully transferred the agricultural Exemption from the previous owner to Skyline. On the $8 – $10 million, 700 acre combination of parcels, Skyline was charged about $400 in taxes. With the new, higher, valuation of the land, the effective gift to Skyline from the assessor approached $90,000.
Fast forward to mid 2006; Reporters questioned Skyline about their ranching activities. Recognizing that something had to be done, and running counter to the other ranchers in this part of the state that think the prime grazing period is in the spring, Skyline dodged a bullet by claiming that they intended to graze cattle on Hammer Flat late in the late fall when the temperatures were lower…and the grass was dead and brown.
Skeptics wondered what the next trick would be. It was a good one.
In late summer 2006, the Discovery fire burned part of Hammer Flat. Skyline used the opportunity to call McQuade’s office to ask for a waiver of the need to pursue agricultural activities on their property. The details are conveyed in a letter from Edward Johnson to Diane Kelly in the assessor’s office on October 4, 2006;
“It has been our intent to put some of our herd of dairy heifers on this property this fall in October/November. However, since a substantial portion of the property was denuded by a fire earlier this summer there is not enough feed available. Hence the decision conveyed to us via telephone today is that due to circumstances beyond our control, the pasturage was badly burnt, the requirement to bring some of our cattle onto the property is waived for the year 2006.”
Of the 11 parcels of ground for which McQuade granted Skyline their agricultural exemption, and the obligation to use it for agriculture, 7 were untouched by the fire and an 8th was only marginally burnt. Even though 560 acres, 79 percent, of Skyline’s land was untouched by the fire, McQuade waived the requirement to use the land for agricultural purposes on all 11 parcels. Another $90,000+ gift from Ada County taxpayers to Skyline courtesy of Bob McQuade!
I cannot fault Skyline for trying to get the best tax deal possible. However, the agricultural exemption is one of the state’s few tools for helping preserve prime agricultural land from the march of urban sprawl. In this case it has been turned on its head and is being used to subsidize a developer–the exact opposite of what it was designed to do.
The degree to which assessors like Bob McQuade are giving away the farm to other developers in Ada and other Counties is in dire need of review.
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