Our Opinion: Timely legislation will save Bay State farming
Agriculture has been an integral part of the Berkshires' economy and character since the area was first settled by Europeans and their progeny centuries ago, and the state House has just made it a little easier for those owning agricultural land to pass it along to descendants who wish to continue in the family farming tradition.
For the past two years, state Representative Kate Hogan of Stow has been working to perfect a bill that would adjust Massachusetts' policy of taxing inherited land at its "highest and best use" value, which treats it as though it were about to subdivided into a development. While this makes sense if a landowner who just inherited his property has every intention of cashing in and doing just that, this heavy tax — based on nothing more than potential owner intent — places those inheritors who wish to continue farming at a crippling disadvantage. Ms. Hogan's bill would rectify the discrepancy by taxing inherited farmland at a much lower agricultural rate for at least 10 years, or until such time as the land was sold for a higher and better use, whereupon back taxes would be owed by the seller.
Many farmers, who often lack cash flow, use the value of their land as collateral to borrow money for buying seeds and equipment, making improvements, paying for labor and generally operating their businesses. If they are fortunate enough to inherit more land, their newly acquired tax burden often forces them to sell off portions of that land in order to afford to keep the rest of it. Sometimes, the tax is self-fulfilling in that rather than pay these taxes, farmers are tempted to sell off the entire property for development.
State Representative William "Smitty" Pignatelli of Lenox, in whose district agriculture constitutes a significant presence, helped Ms. Hogan craft the bill. According to Mr. Pignatelli, the language gives owners of the land who intend to preserve it for agricultural use some breathing space. "Lets say the 'bones' of a farm are good, but the infrastructure isn't," he told The Eagle. "We give them a 'window' of ten years" to work the property, with the idea of giving them a generous opportunity to make improvements — presumably with the money they save by not paying the higher taxes. Should the land be sold before the ten years have passed, owners must pay back taxes to make up the discrepancy. After ten years, no such back taxes would apply to the sale.
If the idea is to protect and ensure the integrity of farmland through the generations, this legislation couldn't be more important to the state or to agriculturally dependent areas like the Berkshires. Rather than send it to the Senate as a stand-alone bill, Mr. Pignatelli, as House co-chair of the Joint Committee on Environment, Natural Resources and Agriculture, worked to include it as an "outside section" in the popular Environment Bond Bill that passed the House on Monday by an overwhelming majority. His job now, as he told The Eagle, is to make sure that language remains in the version to be taken up by the Senate next week. "If it doesn't, we'll take it to the joint conference committee," Representative Pignatelli said, referring to the panel whose job it is to reconcile discrepancies in legislative language between the two houses. It's also a final opportunity for proponents to throw a "Hail Mary" pass for their favored legislation.
Mr. Pignatelli does not anticipate problems, however, and has expressed his confidence in his Senate counterpart on the agriculture committee, Anne M. Gobi of Worcester, to safeguard the agricultural language in her chamber's version. He is "very confident" that Governor Charlie Baker is on board with the agricultural tax adjustment. The tax change could result in some diminished revenue for the commonwealth, but the damage that would be done to Massachusetts' agricultural legacy and economy by doing nothing is irreversible. A pertinent question one might ask is why such a fix wasn't implemented long ago. Farming has become a precarious profession even in the best of times; the industry, especially here in Massachusetts, needs all the help it can get.
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