Beck & Sweeney Bill to Crack Down on “Fake Farmers” Cleared for Full Senate Consideration

Trenton— Legislation long-championed by Senator Jennifer Beck (R- Monmouth) and Senate President Steve Sweeney (D- Gloucester/Cumberland/Salem) to prevent abuse of the state’s farmland assessment law has cleared the final hurdle to passage by the full Senate. The Legislation, S-589, was approved the Senate Budget and Appropriations Committee.

“The current threshold of $500 in agricultural sales set forth in New Jersey’s farmland assessment law has not been increased since its inception and is easily abused,” said Beck. “This bill modernizes the law to better ensure that only those who actively work the land receive the 98% property tax break on their property.”

“Clearly this program is being taken advantage of and it’s the taxpayers who ultimately lose the most. It’s long past time we update the farmland assessment law. This protects both real farmers and the taxpayers of New Jersey, ” said Sweeney.

The bill would boost the threshold of sales derived from farming activity to $1000 per year from the current $500, and provide for a review of the sales threshold every three years. This number was selected based on a 2007 study by Rutgers which calculated how many farms would be disqualified at minimum revenue qualifications of $1000, $2500 and $10, 000. A $10, 000 was estimated to take 398, 093 of New Jersey`s approximately 982, 000 acres of farmland off the preservation rolls.

The legislation also would require program applicants to submit evidence of agricultural sales and/or income to the Department of Agriculture, and require tax assessors to undergo training in farmland assessment as a condition of licensure. Most importantly, the State Division of Taxation and State Board of Agriculture would issue guidelines to tax assessors to aid them in defining legitimate farming activity.

Abusers of the program would face a $5000 fine, in addition to restitution of all taxes inappropriately avoided on property fraudulently claimed under the assessment exemption and other penalties.

“There is something wrong when an individual can sell three cords of firewood to himself and claim the same tax break as farmers producing legitimate agricultural output,” Beck continued. “The abuse of this program is well documented in the press and by the State Auditor and needs to end.”

Press Release

Posted: June 18th, 2012 | Author: | Filed under: Jennifer Beck, NJ State Legislature, Press Release, Stephen Sweeney | Tags: , , , | 11 Comments »

11 Comments on “Beck & Sweeney Bill to Crack Down on “Fake Farmers” Cleared for Full Senate Consideration”

  1. Bob English said at 7:16 pm on June 18th, 2012:

    The bill is a J-O-K-E. They should tear it up, smoke it, bury the ashes and start over. All of the time spent on recent hearings was one big gigantic waste of taxpayers money.

    The threshold was set at $500 in 1964. Raising it to $1000 does not even come close to covering what inflation was during that time period. (If adjusted for inflation, it would be over $3,700 today.) Another $500 only means selling a few more Christmas trees or a few more cords of firewood.

    How about rasing it to $10,000??? That way everyone who is paying their fair share of property taxes do not have to pay extra to make up for all of the “fake farmers.”

    I was trying to remember where I read a piece on the subject and when I googled it I saw this great piece from MMM in May.


  2. Pilgrim said at 1:21 am on June 19th, 2012:

    Bob English nailed it: the change does not keep up with inflation. If the intention was to double the amount required, then the minimum needs to be $7400, so $10,000 is a reasonable number. Beck and Sweeney are trying to pass legislation that gives the appearance of doing something significant regarding tax reform. It is just more smoke being blown in taxpayer faces.

  3. Rick Ambrosia said at 9:10 am on June 19th, 2012:

    I have mixed emotions about this one. On the one hand, it doesn’t seem fair, but on the other, it keeps open land out of the hands of developers. I have never had a problem with anyone taking advantage of this tax break, whether it was Bon Jovi, Judith Stanley Coleman or even Christine Whitman. I just think over development is huge problem. Especially where I live, do to the constant tapping of the aquifer for new construction.

  4. Jim Sage said at 9:33 am on June 19th, 2012:

    Perhaps voters should crack down on “fake
    conservatives” or “RINO’s”—–Jennifer Beck needs to be shown the door!

  5. Mike Harmon said at 11:29 am on June 19th, 2012:

    Keep the garden in the Garden State.

    Republicans using divisive rhetoric such “fake farms” are playing into the hands of those who prefer Monmouth County look like Hudson or Essex County.

    The farm tax break is no more fake than an interest mortgage deduction on a home or accelerated depreciation on a new piece of equipment.

    The farm tax break is a useful tool with the goal of protecting and preserving open space. It works.

    What is wrong is changing the rules retroactively and then attacking those investors or homeowners who made economic decisions based on existing laws.

    While I completely expect the democrats to allow excessive development and increased taxes for their “subsidies within their base” in every town they control. In fact, carving up farms and planting Mt Laurel housing is the Democrat idea of gaining political control over a community.

    Republicans should stay at the forefront of protecting open space. More open space benefits us all.

    The five or ten acre farm with one house on it offers more open space, more areas for wildlife, less traffic and improved quality of life. This benefits all of us that live in Monmouth.

  6. Pilgrim said at 2:02 pm on June 19th, 2012:

    Mike Harmon,

    It doesn’t necessarily follow that the open space you claim derives from the farm tax break/subsidy (‘socialism’, possibly ?) benefits all of us that live in Monmouth. In Monmouth we all pay an open space tax at the county and at municipal level, and then those who don’t have the benefit of the farm tax subsidy subsidize those who do have it. The not so well-to-do end up paying more than their fair share in open space taxes/fees — the law as it stands now doesn’t impact all tax payers equally.

    You are correct when you say that they aren’t ‘fake farms’ because many of these properties aren’t farms at all: They are properties that barely produce traditional farm product that is not the primary source of income for the property owner.

    Again you are correct when you say that the tax break (subsidy) isn’t fake because it is it obviously exists. Your comparison to interest mortgage deduction or excellerated depreciation is incorrect — possibly a red herring.

    “Carving up [six or ten acre] farms and planting Mt. Laurel housing” (very cute) sounds very much like “divisive rhetoric”. And, if more open space benefits us all, then we all should pay equally for the space we benefit from. The phrase level playing field comes to mind, which may translate into diminished subsidies for those real, not fake, gentlemen and lady farmers who aren’t entitled to them.

    Bottom line: the ‘preservation of open space’ is a smoke-screen that allows some an unreasonable and unfair advantage when it comes to paying a fair share of taxes.

  7. TR said at 9:36 pm on June 19th, 2012:

    OH NO I agree with Rick again. Knock it off Ambrosia if you keep talking sense you are going to give me a friggin breakdown.

  8. Mike Harmon said at 10:28 pm on June 19th, 2012:

    Pilgrim – you might not like or appreciate open space but about 75% of the voters in Monmouth approve the open space tax. On top of that many (not all) towns voted to have their own open space taxes.

    Why – because people value the quality of life here in Monmouth and often fled the communities that developed every square inch of good land.

    Not sure why you consider this “tax break” any different than any other. The tax break for the farmer promotes the preservation of open space. Mortgage deductions (only to those that pay mortgages – not cash buyers) promote home ownership. Accelerated depreciation encourages investment in machinery, equipment or real estate.

    There are plenty of taxes on the other side of the coin. How about 50% estate taxes on asset rich (cash poor) farms, estates and small businesses forcing the farmer to sell the “back forty” or the family to sell their business.

    How about confiscatory property taxes. The impact of eliminating farm breaks will result in higher taxes and then sales of land which leads to more development. Pretty simple really.

    Pilgrim would you also propose rezoning those 10 acre “farms” into 5, 10 or 20 lots.

  9. Bob English said at 10:11 am on June 20th, 2012:

    Just to be clear….there should be a farm tax break for real farms. 10k a year threshold would be a very low but reasonable starting point. The idea though that you can sell a few cords of firewood to family and friends and get a 98% tax break is crazy though.

    A study about a year ago showed that fake farmers are costing local municipalities in NJ over $80+ million per year. That means everyone else is paying $80+ million extra!!!

    Note that even at a $1000.000 threshold (which is laughable) you can reach that by selling less than $20.00 in products every week…..I could probably do that from my tomato garden!!!

  10. Pilgrim said at 3:24 pm on June 20th, 2012:

    Mike Harmon,

    The primary topic is property taxes that everyone living in NJ pays. The topic isn’t open space, which has its own tax, again at the county and municipal level. The topic isn’t machinery, which not every taxpayer owns; nor is it mortgage deductions, which not every taxpayer has — renters pay property taxes which are bulit into their monthly rent, if you have a smart landlord.

    Regarding “tax break”: I’m pointing out that the break is a “subsidy” for those who own five or more acres, which is not what the average taxpayer/resident owns. To be more specific, I don’t think it is a reasonable nor fair subsidy because it directly benefits the few versus the many; and, for most of the many it is an unreasonable financial burden that should not be justified by saying it perserves open space that the many enjoy, because they don’t. The reality is that the few who enjoy the subsidy are the same few that benefit the most by enjoying their own land. I don’t get to enjoy Bon Jovi’s property and I do get to subsidize his $250,000 tax “break”. The ‘open space and quality-of-life’ arguement is a misleading position (again, red herring) because it changes the conversation to an unintended by-product (open space preservation) of the ‘tax subsidy’. Again, the fewer ‘property-rich’ residents benefit the most from the property tax subsidy, not the ‘property-poor’ residents.

    The tax “subsidy” for the traditional primary form of employment working farmer/businessperson is not designed to promote open space; it is designed to promote and protect the business of farming AS THE PRIMARY FORM OF EMPLOYMENT. On the other hand, the open space tax is designed to promote the preservation of open space for ALL residents to enjoy.

    I think you are either missing the primary point, or you are ignoring it because it doesn’t align with your point of view; or it dosen’t support your property tax status; or you think it is appropriate to subsidize the land rich by allowing them to exercise a tax ‘break/subsidy’ that they derive greater benefit from then those that are doing the subsidizing. Where is the direct return-on-investment for the average taxpayer?

    Finally, I have a tremendous appreciation for open space and strongly encourage reasonable and equitable preservation of this resource. I don’t appreciate private space preservation that is paid for with public tax dollars and a point of view that attemps to justify an undue financial burden on the many by claiming that the many equally benefit from the primary result of lower taxes for the few who are land rich. The practice needs to be changed significantly and the bill that both Beck and Sweeney are promoting is not at all significant when it comes to the impact on the many regarding the proposed changes for the few.

  11. Mlaffey said at 6:23 pm on June 20th, 2012:

    Taking away the tax breaks from these small farms will cause your taxes to go up. Municipalities pay more in services then they collect in taxes on residential development. If these properties are subdivided you will pay higher taxes down the road. Yes there are some abuses but we must be careful not to throw out the baby with the bathwater.