State program lessens taxes if farmers clear trees
ZIMMERMAN, Minn. (AP)--Larry and Wanda Thoreson once grew alfalfa on their 135 acres just northeast of Zimmerman. Then Larry decided to plant trees, lots of trees, figuring the land would be more appealing to developers that way.
"We're on fixed incomes now and we looked at this land as our retirement, our nest egg," said Larry Thoreson, 67. "We had some trees coming up that we were really happy with."
But now, Thoreson is clearing his four parcels of land as quickly as possible, turning much of it back into farmland, cutting down the trees he adores. He says he can't afford to keep the trees because of new twists to the Green Acres Program--a program that was supposed to ease the pressure of property taxes for farmers, but which has literally changed the landscape of farms throughout Minnesota.
With nonproductive acres susceptible to taxes far higher than taxes placed on tillable soil, and with a Jan. 2 deadline for declaring property that can be used for agriculture production, farmers are scrambling for solutions as they clear land they never thought they'd again farm.
Legislators took action to change the law this spring after a February report by Legislative Auditor James Nobles revealed that developers were reaping huge tax breaks from the Green Acres program. But some officials say the changes have brought unwanted consternation for farmers and officials who are trying to answer to them.
"When the Green Acres program was created 40 years ago, this is not what the state of Minnesota intended," said Thom Petersen, director of government relations for the Minnesota Farmers Union. "I'm sick when I hear that farmers--strong conservationists--are clearing their land because they don't know what else they can do."
Even farmers well-schooled in government programs and lingo have altered their land against their better judgment. Years ago, Dennis Berg, chairman of the Anoka County Board, planted rows of trees to use as a windscreen, protecting crops on his 60-acre farm. Last summer, Berg cut down his trees.
"Anyone who farms knows that if you have 60 acres, you don't plant on the entire 60 acres," Berg said. "But now, with the new Green Acres laws, I can't afford to keep land that isn't considered tillable."
In Thoreson's case, it didn't matter how tall the trees were that he cut down; the taxes were going to be higher and would cut too much into the income he and his wife have to live on, he said.
"I pay $36 a year for one parcel of land," he said "But in 2009, if that land is not considered tillable, the taxes go up to $700 a year for that parcel."
According to an Aug. 13 memo from the Minnesota Department of Revenue to county assessors, the 2008 Minnesota Agricultural Property Tax Law changes to the Green Acres program were supposed to aid farmers by giving them preferential property-tax treatment--but only to lands that are used for "productive" agricultural purposes.
Land would be categorized as either "productive" or "nonproductive rural/vacant," according to another Department of Revenue memo, this one sent to county assessors on Aug. 13. Yet another memo, dated Aug. 19, said that farmers needed to notify the state with plans for their soil and talked about options for nonproductive land that had been grandfathered into the Green Acres program.
The frequent memos to county assessors and letters to farmers raised as many questions as answers. Anoka County Commissioner Berg, who received several inquiries from farmers and friends, fretted about his own land and what he called "the inconsistencies" in the many Green Acres letters he was receiving from the state.
He drafted a letter to constituents saying that the "law will mean a real hardship for many landowners in Anoka County and throughout the state," warning that some owners would be forced to sell their farms, clear woodlands, fill low areas. At the least, Berg wrote, landowners would have to make unplanned payments or pay tax penalties.
"You are taxing people out of their farms," Isanti County Commissioner Susan Morris said in September. "My family has had their farm over 130 years and we're proud of our heritage. We'd hate lose it."
Sen. Rod Skoe, DFL-Clearbrook and chairman of the Senate Property Tax Division Committee, said changes were made to Green Acres because more than one-third of the state's 87 counties were not implementing the law. "There was nothing uniform throughout the state." Skoe said some of the earlier descriptions of changes to the Green Acres law that farmers received in the mail "may not have been accurate and added to the confusion."
Sen. Tony Lourey, a DFLer from Pine County, said the letters that were sent to farmers are "very, very confusing." He referred to the cutting down of trees as "unintended consequences" of the law.
The Jan. 2 deadline will allow landowners a chance to indicate their "intent to withdraw" their nonproductive acres from the Green Acres program, said Gordon Folkman, director of the Department of Revenue's property tax division. If they withdraw land from the program, they will have to pay deferred tax on that land by Nov. 15.
Landowners don't have to file their "final determination" until the summer, he said.
The department wants to afford farmers the extra time to better educate landowners over what has become an issue farmers are finding as threatening as the weather.
Larry Thoreson said he couldn't wait.
"There are piles of lumber scattered about my property," he said. "Trees I cut down. If they were dead trees, it would be easier to take. But these were live.
"It sickens me. But what choice did I have?"