Reform Farmland Assessment Bill is No Reform

A new report from Spotlight has come out stating that a law signed by Governor Christie in 2013 called S589 (Sweeney) has failed to fix certain provisions in the Farmland Assessment program to prevent fake farming.  At a time when property taxes are soaring and farmland is being paved over at historic rates, it has become evident that changes to program are needed.  However, from the beginning the Sierra Club was opposed to this legislation. The report suggested that even though last year the new threshold went into effect, the number of farms in New Jersey only dropped by 1 percent and the total assessed value dropped by a fraction. We were concerned with this program because it only increased the amount of agricultural product revenue from the current $500 annually, set in 1964, to $1000.  Based on inflation it should be over $10,000 as done in other states like New York.  The legislation also did not end tax breaks for developers, land speculators or corporate office parks that hide beyond farmland assessment.  By qualifying for the program, property owners receive a tax break on land used for agricultural purposed with a minimum of five acres of land.  

“We said from the beginning that the bill that is now a law was a fake farm reform bill. The problem is fake reform is worse than no fix at all. This report shows there really hasn’t been any changes with fake farms since the signing of this law. We opposed this legislation because it was fake reform that ends up protecting many of the same land owners that are trying to get around having to pay their fair share of property taxes. These property owners are paying almost no taxes and then want to come around and develop them for a huge profit. Now that the program hasn’t been fixed and property owners still haven’t paid their fair share of taxes, the rest of us are on the hook,” said Jeff Tittel, Director NJ Sierra Club. “Instead of fixing the program, this legislation continued the failed policies of the past. This legislation did nothing to deal with land speculators, corporate office parks, or fake farmers. That means there are millionaires like Bruce Springsteen and Bon Jovi and corporations like Six Flags are fake farming, getting a huge tax break.”

In central New Jersey the largest companies in the farmland assessment program are developers and land speculators. There are businesses like the Whibco sand and construction aggregates producer and PSE&G in Cumberland County, Exxon in Hunterdon, the Hercules brownfields site in Morris, and Six Flags Great Adventure in Ocean that are taking advantage of the program. While most farmers are dedicated and really need help from Farmland Assessment, we are concerned about those who are taking advantage of the program.  Some of the biggest abusers are large corporations and developers.  The largest “farmer” in central New Jersey is Thompson Land Company, a land speculator and developer, and the largest “farmer” in Hunterdon County is Toll Brothers.  The Farmland Assessment program has been used by developers for years to land bank property for future development.  They buy the property cheap and do just enough logging or harvesting of hay to qualify for the program.  After paying less than 10% of the assessed value in taxes, they develop the property and cash out with a tremendous amount of money.

“The law currently in place shows that it is not how well you farm the land, it is how well you farm the government. This is just a land bank for future development and sprawl projects. What these businesses and developers are doing are farming until they can grow houses. There are businesses, developers, celebrities, and even politicians who have been taking advantage of this program for decades. This is extremely unfair because when they don’t pay, the rest of us do. It means more pressure for ratables because some aren’t paying their fair share of property tax. This is actually a discriminatory program because anyone with over 5 ½ acres can get away with it. This program is another form of subsidizing wealth land owners at the expense of everyone else,” said Jeff Tittel. “The Merrill Lynch facility was fake farming for decades and then sold to Southfield Corporate Office where there are development approvals between the office buildings where they are still ‘farming’. Six Flags is even fake farming so they can turn clear-cut thousands of trees for solar and build a shopping center or hotel.”

There are other examples of corporations taking advantage of the program like celebrities rockers Bruce Springsteen and Jon Bon Jovi and publisher Steve Forbes as well as politicians like former Congressman Scott Garrett in Sussex and current Rep. Rodney P. Frelinghuysen are. Roche Pharmaceuticals in Branchburg, Merck’s headquarters in Readington, and Bristol Meyers Squibb in Hopewell are all considered farmland by the Farmland Assessment program.  There is even a developer in Ringwood who is getting Farmland Assessment credit for property that he is currently building on.  On top of that, he is using the trees on the property to build the houses and meet his agricultural quota. This legislation also didn’t change the requirement for tree farmers so the same former state Senator can still sell ten trees from her estate to qualify for tax breaks.

“New Jersey has a serious problem with wealthy residents that own large lots and McMansions who use Farmland Assessment to dodge their taxes.  In order to get a 90% tax break on their land, they simply buy a few horses and grow some hay.  Steve Forbes of Forbes Magazine can attest to this,” said Jeff Tittel. “In New York State, ten acres of land and $10,000 worth of agricultural production is required to qualify for their Farmland Assessment.  New Jersey municipalities put millions of dollars a year into this program, yet we are #1 in the nation for loss of farmland as a percentage of overall farmland. This is extremely unfair because a vacant five acre lot in Ringwood is assessed at over $120,000, the same lot in the Farmland Assessment program is only assessed at $12,000.  One property owner pays $25,000 for their land while the other pays only $2500.”

By extending the roll back or creating a sprawl tax of $4000 an acre per year, about $40 million a year could be generated; almost enough to run the Farm Preservation program.  Extending the rollback would be a great way to help protect farmland and open space and also produce more revenue to fund farm preservation.  Currently there is a three year rollback when you change the use from farmland to development.  By extending the rollback to ten years, millions of dollars for farmland and open space preservation could be generated.  This money would not only help fund the program, it would mean that some of the farmland money from the Garden State Preservation Trust could be shifted to protect water supply lands or to build urban parks.

“Like we said from the beginning, this legislation does not fix a broken system and what we need is real reform. Four years ago, we knew this program won’t work because the $500 revenue was set in 1964, which is only $25 today. The Farm Bureau even supported it so we knew it wasn’t going to work. When the legislature passed this fake reform, they seemed to be more afraid of the land speculators and the Farm Bureau than improving the program to actually protect New Jersey’s diminishing farmland and stop abuse of the program. Especially now when municipalities are caught in such dire financial need, as are the taxpayers. There is no problem with the Farmland Assessment program as long as the land is held as farmland or open space,” said Jeff Tittel, Director of the New Jersey Sierra Club. “Fake reform is worse than no reform because it prevents real reform.”