Bill seeks to curb abuse of tax break
Requests for farmland status would get review
By: William Westhoven
Morristown Daily Record
USA Today Network - New Jersey
..... Some 35,000 New Jersey landowners may eventually have to clear a higher bar to qualify for the state's lucrative farmland preservation tax benefit, which can reduce local property tax bills on assessed property by up to 98%.
.....
The state Senate's Economic Growth Committee voted 4-0 on Thursday [12/12/2024] to advance legislation sponsored by Morris County republican Senators Joe Pennacchio and Anthony Bucco to establish a commission to review and recommend changes to the farmland program to "ensure the fair allocation of tax benefits."
..... Pennacchio supports the program ans "an essential tool that preserves open spaces and safeguards our water and food supplies."
..... but the sheer number of properties approved for such a deep tax break - including some wealthy estates in Morris, Somerset and Hunterdon counties - "raises serious questions about the program's integrity,: he said.
..... "Establishing a review commission would address these concerns, ensure proper enforcement of regulations and provide much-needed transparency for taxpayers," added Pennacchio, whose district includes parts of Morris and Passaic counties.
..... The bill's advancement comes after a NorthJersey.com report in August [2024] detailed how easy it is to obtain a farmland tax assessment, and the long history of wealthy and prominent residents who have claimed the break.
..... Beneficiaries past and present include former Governor Christine Todd Whitman and President-elect Donald Trump, whose Bedministr golf club and summer home enjoys a farm assessment on 183acres.
..... Outgoing NJ Transit CEO Kevin Corbett took flak in 2019 for claiming a tax break based on a flock of sheep kept at his Mendham Township home.
..... The bill, S-3446, would establish a nine-member Farmland Assessment Review Commission to ensure that the farmland program remains up-to-date, effective and properly enforced.
..... "The public has a right to know if the system is being gamed," said Bucco, who also pres presents parts of Morris and Passaic. "The Farmland Assessment Review Commission will examine the level of farm activity required to justify property tax reductions and assess the impact that those benefits have on surrounding communities. Our goal is to ensure the program remains true to its original intent and is safeguard from exploitation."
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New Jersey lawmakers approved the Farmland Assessment Act of 1964 to help farms that were being squeezed out of business as demand for suburban housing drove up land values - and the taxes hat went with them. Today, [12/16/2024] about 35,000 landowners enroll some part of their properties in the program.
..... The commission would include the state secretary of agriculture and the director of the Division of Taxation in the Treasury Department among its appointed members.
..... A companion bill in the Assembly, A-4875, was introduced in September [2024] by Assemblywoman Aura Dunn, R-Morris. It has yet to have a cosponsor sign on. Democratic Senate President Pro Tempore Shirley Turner, representing District 15 in Hunterdon and Mercer counties, is cosponsoring the senate bill.
..... "We'll need another year to get it through the Assembly, but I think it's a subject that we really should be addressing," Pennacchio said.
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The legislation still must pass the full Senate and state Assembly and receive the governor's signature to become law.
Who qualifies?
..... To qualify for a farmland assessment under current law:
* A property owner must own at least 5 contiguous acres devoted to agricultural/horticultural use.
* The land must be devoted to agricultural/horticultural sues for at least two consecutive years before the tax year.
* The land must continue in agricultural/horticultural sue to the end of the tax year for which the application is made.
* Gross sales of crops or livestock must total at least $1,000 per year for the first 5 acres, plus $5per acre for each additional acre.
* Gross sales of woodlands or wetlands under a Woodland Management Plan must total at least $500 per year for the first 5 acres, plus 50 cents per acre for any additional acres.
* For farm management units less than 7 acres, descriptive narrative of agricultural/horticultural uses, a sketch of the location and the number of acres actively devoted is required.