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SG-W:/ FARMLAND TAX PROPOSALS



Forwarded message on farm bills:
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Enviro-Mich message from Patty Cantrell <patty@mlui.org>
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Media ALERT
from the Michigan Land Use Institute

Contact:
Keith Schneider, executive director
Patty Cantrell, economic analyst
231-882-4723

NEW FARMLAND TAX PROPOSALS ENCOURAGE DEVELOPMENT, NOT PROTECTION
Hidden Subsidy Invites Rampant Land Speculation.
May 15, 2000

http://www.mlui.org/projects/enviropolicy/englerrecord/agtax.html

A package of farmland-related bills moving through the Legislature this week 
includes two measures that are sure to accelerate the rate at which
crop, orchard, and pastureland are slated for development. Those
proposals, Senate Bills 1246 and 709, provide developers and land
speculators with a taxpayer-funded subsidy to buy and develop farmland
at markedly reduced property tax rates.

The proposals reward land speculators by intentionally failing to make
an important distinction between land used for farming and farmland
carved up for development. Other states address this problem by
requiring those who convert the land to repay the taxes they avoided
before developing it. The two Michigan proposals are patterned after
that idea. But their tax repayment requirements are so low that this
"recapture fee" would mean nothing to speculators, whose intention is
not to keep the land agricultural but to develop it at the most
profitable opportunity.

If approved, S.B. 1246, and S.B. 709 would accelerate the loss of
farmland in Michigan, erode the foundation of the state's $4 billion
farm economy, and transform miles of rural countryside into ugly and
damaging sprawl. Moreover, they would defeat the purpose of Gov.
Engler's proposed Farmland Preservation Fund. Money for the fund is
supposed to come from a tax recapture fee on farmland that is developed.
But if those recapture fees are negligible, the fund will be useless.

The Michigan Land Use Institute has analyzed S.B. 1246, and S.B. 709, as
well as the other proposed farmland protection bills. We conclude that,
with the exception of these three bills, the package is strong and will
go a long way toward helping farmers lower their costs, stay on their
land, and keep Michigan agriculture strong.

The Institute recommends that the Legislature amend the
developer-friendly bills significantly to eliminate the incentive for
developers to speculate on agricultural land at the public's expense.
The Institute calls on the Legislature to establish a credible
agriculture tax recapture fee so that the state's new property tax
policy produces the farmland preservation voters want. 

See the full report, including actual examples of speculator windfalls, on
the Institute’s Web site at
http://www.mlui.org/projects/enviropolicy/englerrecord/agtax.html


*************************************
Patty Cantrell
Public Trust Alliance Project Manager
MICHIGAN LAND USE INSTITUTE
P.O. Box 228, 845 Michigan Ave.
Benzonia, MI 49616

tel: 231-882-4723 ext. 18
fax: 231-882-7350 
e-mail: patty@mlui.org
internet: www.mlui.org


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