[ OUR OPINION ]
City should suspend
ag land tax law
FARMERS already have a tough enough row to hoe without having to weed out more bureaucracy. The city's new tax measure, which was intended to ensure that land designated for agriculture was being used for farming, has caught growers unaware and could result in boosting their tax liabilities unreasonably.
A new ordinance intended to preserve agricultural lands has resulted in higher taxes for farmers.
Since there is little time for the City Council to undo the poorly structured law, it should place a moratorium on enforcement until members can work out a solution that includes recommendations from those who make a living off the land.
The ordinance, which the Council approved last year, was aimed at discouraging non-agricultural use of farm acreage by placing a higher tax on property not actively used for farming.
Under the old valuation system, agricultural lands had a set value of $2,500 per acre, regardless of location. The new system, however, sets value at "highest and best use." The result is that if a farm is next to a residential area, where land values are higher, tax assessments for the farm land also will increase, sometimes as much as six to 10 times, according to Alan Takemoto of the Hawaii Farm Bureau Federation.
Farmers operate on thin profit margins, so tying their assessments to their neighbors' -- over which they have no control -- unfairly burdens them. Further, setting residential development as a standard for "highest and best use" is counter to the intent of the law: It encourages farmers and land owners to abandon agriculture.
The law burdens farmers with bushels of paperwork. To establish that their land is being cultivated, farmers must show plot plans of fields, roadways and other features, present a copy of a general excise tax license, figure out crop production values, obtain letters from owners whose land may be leased and gauge how long the land will be used for agriculture. With many farmers operating on short-term leases -- some even month-to-month -- there's no way they can predict the land owners' intentions.
It appears that the rationale for all of this is that the city has no resources to check on whether land is being used for farming or not, so it places the responsibility on farmers to justify their lower assessments. However, state inspectors apparently verify agriculture land use and there's no reason why the city could not use their data to confirm farmers' claims.
The city should be commended for trying to deter development of so-called "gentlemen's farms" and the evasion of higher tax bills. Nonetheless, good intentions count for little but a crop of trouble and higher costs for farmers.