Taxes

Ag Exemption Right or Wrong?

By: Taxpayer Murphy

For all the taxpayers who are unhappy with their recent assessment increase, there should be an even greater cause of concern.

Any property which is under assessed or is receiving some form of an exemption not entitled by law is being subsidized by all other taxpayers, by reduced taxes. Properties which are getting an agricultural exemption, without growing crops are the most glaring examples.

The recent photograph illustrates that it is a field of weeds and no agricultural crop is being cultivated. Paramount.jpg
The 40 acre property is located at the southeast corner of Chinden and Linder Roads, in full view of the County Assessor. It has been owned by a California limited partnership since January 25, 2004.

Residential taxpayers are being punished by the Assessor valuing their residential properties at full 100% of market value (maybe over 100%) while other taxpayers are not paying their fair share. This example may be one of many across Ada County. The Assessor has valued other land in this square mile between $75,000 and $80,000 per acre for residential development. This property most likely has some commercial potential at this high traffic intersection.

Applying a conservative valuation of $80,000 per acre, the difference between the agricultural assessed valuation of $1,573 per acre (36.55 acres) is $78,427 per acre for a total difference of $2,866,507. Based on 2006 tax rate for area, the tax subsidy is $29,584 for 2007. If a commercial valuation was applied, the subsidy is even greater.

Employees at the Assessor’s Office maintain they are just complying with Idaho law when taxpayers inquire about their 2007 values. The question for the County Assessor: “is he complying with the law on all properties, or are some taxpayers receiving special treatment to the detriment of others?” Political double talk should not be an acceptable answer.

ASSESSOR RESPONDS: “The parcel in question was granted the agricultural exemption in 2005 by former appraiser Greg Ruddell who has since left the county. The law presumes anything over 5 acres with no improvements to be agriculture. Staff does a drive by inspection in December, but it is difficult to determine if a crop is on the land at that time.”

Comments & Discussion

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  1. Touchy subject. But you shouldn’t level your criticism at the feet of the Assessor. They have laws to administer some of which haven’t been revised for decades. With growth there has come some perceived abuses and in my experience nobody wants to curb those abuses more than the Assessor’s Office.

    Having said that, good luck trying to get the legislature to change it. The ag exemption is a sacred cow.

  2. The problem is that we pick around the edges of the property tax problem without attacking the tax as a whole.

    1. Property tax is largely a tax on debt.. not wealth. And in many cases where it’s truly a tax on wealth because the property is paid for, the taxpayers are older and on fixed income.

    2. The property tax is impossible to fairly administer. My neighborhood increases in value faster than yours and an overall levy change can’t account for the differences.. .the services we receive remain the same and I get a larger percentage increase than you do.

    3. The property tax funds much more than services truly related to property (fire, wastewater treatment, solid waste disposal, and to some extent, police)

    The solution, in my opinion, is to work on limiting the property tax to the actual cost of providing services to that property, regardless of value, and shifting the remainder of the costs to other sources. (I know..requires leadership and major change. Pie in the sky.)

  3. For me, the notion of an agricultural exemption is very attractive… IF it’s used for its intended purpose, giving farmers a break on property taxes (and maybe a bit of incentive NOT to sell their farmland to developers).

    If it’s used to give a big tax break to a developer while he lines up his Development Ducks… fuggeddaboudit!

    I’d love to see more oversight – eliminate the abuses. And there’s plenty of anecdotal evidence to suggest that non-agricultural land is getting the break due to shady nudge-nudge wink-wink practices.

  4. Looks to me like they ought to get Phil Batts weed crusader son after those guys. That field is not even worth harvesting the hay. There can be up to $10,000.00 fine for not taking care of the noxious weeds I heard on the radio. Those creeps will probably harvest the weeds and call it hay to get the “ag” exemption.

  5. Rather than pointing at this, that, or the other person who “should” pay more taxes, when are the citizens of Idaho going to do the only thing that makes sense and DEMAND that the legislature fix the tax code by giving us a Prop 13 type tax structure? It’s the only fair way to administer the property tax code. I know. I lived under Prop 13 for years, and while property value in San Francisco was going through the roof, I wasn’t forced to move because I couldn’t afford to pay taxes. Prop 13 WORKS.

    What are people on fixed incomes supposed to do? Especially for retirees, it’s necessary to live near city services and hospitals. You can’t sell and “move” because there’s no where to move to that’s more affordable except farther away. As more and more baby boomers reach retirement age–and therefore are on fixed incomes–the unfairness of facing huge property tax increases WHEN YOU’VE DONE NOTHING, HAVE NO EXTRA MONEY IN YOUR POCKET, AND ARE ONLY BEING FORCED TO PAY MORE BECAUSE YOUR NEIGHBOR SOLD A HOUSE FOR PROFIT is so blatant it makes my head spin. Why can’t people see that?

    I watched old people being shoved out of their homes in California because they couldn’t afford the taxes. It’s an ugly situation. (I know, there’s protection for the poor, but middle class homeowners who have saved a “nest egg” for when they need assisted living or at-home nursing care don’t qualify. The legislature expects people to give up what little savings they have in order to pay the government property taxes because of an assessed valuation that’s only “on paper.” It’s not REAL money until the house is sold!)

    By the way, the big “tax break” the legislature “gave” us last year has been completely eliminated by this year’s assessment hike. Thanks for nothing.

  6. Mr. Assessor,

    Get out of the car and look. Is their stubble? Was it tilled? Did they put any water on it? any sign of live stock? Any fences? Name a visible December crop in Idaho. Keep shifting blame too.

    Perfect example of Moronitude perfected by the Deciders..

  7. Greg Ruddell
    Jun 6, 2007, 6:09 pm

    I’m Greg Ruddell. I have been gone from the Assessor’s Office for two years. Assessor may be correct, the land was “activitely farmed” at the time. Agricultutral exemption law is very clear, must be activity devoted annually. There is no mention of any presumption. (Confirmed by a current employee)

    Tax Commision Rules IDAPA 35.01.03 Section 645.03(d) reads as follows: Land, More Than Five (5) Contiguous Acres. Land of more than five (5) contiguous acres under one (1) ownership, producing agricultural field crops, nursery stock, or grazing, or in a cropland retirement or rotation program, as part of a for profit enterprise, shall qualify for the speculative value exemption. Land not annually meeting any of these requirements fails to qualify as land actively devoted to agriculture and shall be valued at market value using appraisal procedures identified in Paragraph 645.02.a. of this rule.

    It is very evident from Assessor’s response, there has been nobody from his office out to inspect the land in two years, since I left.

  8. G Man–
    This one has me a little confused. I can’t tell if there is an error, an oversight, colusion, or lack of attention to detail. Sounds like we need some kind of a property tax czar…like that new general who oversees the generals to get things done in Iraq. This one doesn’t appear to have a clear answer.

  9. Seems to me the assessor folks gave you a pretty clear answer: They looked at the land in December, when they couldn’t tell whether it was cultivated. They very carefully have avoided looking at it since (apparently driving through this busy intersection with their eyes closed?) so they wouldn’t have to admit it was not in agricultural use.
    Could it be that part of the owner’s saved taxes somehow influence the ass-essor types to avoid opening their eyes as they drive by? I’m not suggesting bribery, just wondering what their snow-job excuse really means. And I noticed the assessor’s comment diidn’t say anything like, “Thanks for pointing out this error. Now that you’ve done so, we’ll raise the tax to its proper level immediately — and retroactively if possible.”
    Surely you must have somehow lost that part while typing the response into this blog, right?

  10. Rod in SE Boise
    Jun 7, 2007, 8:38 am

    The entire tax system needs revision and improvement. We should do away with the property tax and sales tax as both are regressive taxes (among other objections). Tax money for legitimate services provided by government should come from taxes on income.

  11. Yes, I'm from California - So What!
    Jun 7, 2007, 11:34 am

    My first thought after reading this article was alienating farmers in a predominantly agricultural state – maybe not a great idea? But then, not being a farmer myself and having a second thought on this issue, you would think that farmers who revere their exemption can’t help but get a little annoyed when farmer John next door sells his land to a developer and find out that the developer maintained the Ag exemption.

    Let’s also not forget, those unscrupulous land owners who plant bogus crops with no intention of farming it in order to maintain their exemption and slip under the assessor’s radar. I know on a federal level some would call this tax evasion and consider it a crime. What’s fair is fair and I’m sure most farmers agree that if land is not being used for agriculture then it shouldn’t enjoy the Ag exemption.

    Maybe the assessor’s office needs to change their brand of coffee to a stronger brew and wake up. I believe, when the local news gets hold of this loop hole in the tax law, all hell is going to break loose and some heads are going to roll.

  12. Yes, I'm from California - So What!
    Jun 7, 2007, 11:34 am

    My first thought after reading this article was alienating farmers in a predominantly agricultural state – maybe not a great idea? But then, not being a farmer myself and having a second thought on this issue, you would think that farmers who revere their exemption can’t help but get a little annoyed when farmer John next door sells his land to a developer and find out that the developer maintained the Ag exemption.

    Let’s also not forget, those unscrupulous land owners who plant bogus crops with no intention of farming it in order to maintain their exemption and slip under the assessor’s radar. I know on a federal level some would call this tax evasion and consider it a crime. What’s fair is fair and I’m sure most farmers agree that if land is not being used for agriculture then it shouldn’t enjoy the Ag exemption.

    Maybe the assessor’s office needs to change their brand of coffee to a stronger brew and wake up. I believe, when the local news gets hold of this loop hole in the tax law, all hell is going to break loose and some heads are going to roll.

  13. We own a little rental property in Boise – it is probably 80 years old, no air conditioning, furnace probably 50 years old. The house value has declined but the value of this little .14 acre property has skyrocketed so that the taxes on it are only $87.00 less than our .29 acre property in Eagle. We have an older couple living there and we haven’t raised their rent in years because they are on a small fixed income. Unfortunately for us Ada County nows makes more money off this house than we do.

  14. I agree with Gordon (comment 9.) that the appropriate response by the Ass-essor is to correct the error. Fix the problem, not fix the blame. It is clear that the staff has been working in the neighborhood, and they missed this error. Simple enough. But now it is being brought to your attention, so fix it. Duh.

  15. Prop 13 NOW!
    Jun 7, 2007, 11:33 pm

    It is time for Prop 13 NOW! before we all have to move out because we cannot afford the tax load.

  16. To “Prop 13 NOW!”–

    Where do I sign up?

    Sleuth

  17. Greg Ruddell
    Jun 9, 2007, 4:06 pm

    This is former Deputy Assessor Greg Ruddell to correct my prior comment. Further review of Ada County Assessor website, http://www.adacountyassessor.org/propsys, the assessor office took photographs of adjoining parcels on April 19th & 24th, 2007. These photographs can be located by searching parcel numbers S0425212480, R1065270120 & S0426120550. Review interactive map for parcel locations, they adjoin Murphy referenced parcel. In fact, parcel #S0425212480 indicates some type of construction and the agricultural exemption was left in place for 2007, so there appears to be two errors.

    For California guy, the assessor does not furnish coffee for his employees and with their pay they can’t afford very good coffee.

    EDITOR NOTE–Looks like you are probably onto something here. Thanks to the good offices of the GUARDIAN and your sleuthing, the error will probably get corrected at the courthouse and taxes on the property in question will rise as they should.

  18. What would it take to get something like Prop 13 on the ballot? I’m sure between Ada,Canyon, and Boise county at least 50,000 registered voters would sign a proposition to get it to ballot.

    EDITOR NOTE–The problem we have in Idaho is that citizens can place it on the ballot, vote to approve it, and the legislature simply ignores the will of the people and REPEALS the citizen law. They did it the last go around and few were removed from office at the next election. The Supremes ruled the legislature can repeal ANY law. The legislature RULES. They don’t serve.

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