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Taxes on the 4th of July!

So, how is it if things are so bad that property taxes are going up?

Jul 01, 2011


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Denis Prosperi
Chester Andrew
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Russ Waymire
John "Dusty" Giacone
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Mark Watte
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Piedad Ayala
Tom Barcellos
Jim Walls

Taxes on the 4th of July!

It's always great to wake up in the morning, get the newspaper and a cup a coffee and read about how farm property taxes are going up (article below).  What better way to start the day.  As many of you know who read this newsletter, Families Protecting the Valley isn't an anti-tax organization, it's a water policy organization.  We are more concerned with our state and federal lawmakers policies, along with their bureaucratic friends, than we are with county tax assessors.

Farmers have always been willing to pay their fair share, more than their fair share really.  Look at all the communities around the Valley and see all the farmers and farm related businesses supporting their local communities, high schools and universities.  A lot of extra-curricular programs need support and farmers have always been there to give it.  Even Bulldog football coach Pat Hill recognizes the importance of ag support with his Green V on on the Dogs football helmets. 

Now, back to the taxes:  we're not going to complain about the announced tax increases for farm land, although the timing (4th of July weekend) could have been better with all the TEA (Taxed Enough Already) Party talk going on these days.  We have written several newsletters explaining how people need to 'connect the dots' when watching how water policy impacts the economy of the cities and counties of the Central Valley.  When we can't get water and have to fallow land, property values decrease, fewer crops are harvested, fewer workers are hired, fewer property taxes and sales taxes are paid, and more teachers and policemen and firemen and prison guards are laid off. 

So, how is it if things are so bad that property taxes are going up? 

First of all, we'd like to make VERY clear that it has NOTHING to do with improvements to water policy by elected officials or bureaucrats, although we do like Devin Nunes' H.R. 1837 which is an attempt to repeal and replace the River Restoration Settlement.  It has a good chance of passing the House, but not so good we think in the Senate.  Maybe if a strong message is sent in November 2012 it will have a better chance. 

Secondly, we'd like to thank Mother Nature for providing generous rainfall the past two years.

Thirdly, Obamanomics and the Federal Reserve's policy of Quantative Easing (printing hundreds of billions of dollars).  The influx of all these new dollars into the economy has led to the devaluation of the dollar.  Investors know one thing for sure:  the dollar is no place to keep the dollar.  Instead, they have put their money into gold or farm commodities or farm land.  This has, inadvertantly, been good for farm commodity prices and the value of farm land. 

Fourth, this gold and commodity situation is another bubble in our humble opinion.  It will burst just like the dot.com bubble in 2000 and the real estate bubble in 2007.  When the burst occurs and prices go down to real levels it would be nice to have water policy in place to help cushion the fall.  When prices fall and when there is another drought (do you doubt that there will be another drought?) farmers will need water policy in place so they can continue to make a living.  By the way, when prices go back down there will also have to be a downward adjustment in property taxes. 

So, we will pay the bubble tax created by the bubble economy, but don't necessarily think it's a great way to run a country. 

Hope your 4th of July is a good one.  If you enjoy our newsletter, please help us grow by sending it along to friends.  If someone sent this to you and you'd like your own free subscription you can sign up here.


Fresno County farm tax up average of 23%

Unlike other property, ag land values increase.

By Kurtis Alexander / The Fresno Bee

Fresno County's assessor on Thursday submitted a final $57.3 billion tax roll for the coming year, locking in higher property taxes for thousands of agricultural landowners and ensuring an increase in the county's total tax stream for the first time in three years.

While most residential and commercial property remained flat or lost value this year, assessments of farmland rose as crop prices went up and new production began. And, according to the Assessor's Office, a lot of farmland had not been reassessed – sometimes for decades – meaning tax bills due out this fall also will reflect years of unrecorded gains.

The farm tax hikes will average 23%, the office reports.

The increase in the total roll, while less than half a percent, is good news for county government, schools and special districts, which have been struggling with falling revenues. It's bad news, however, for farmers who have heard about the pending tax bump and say it's not a good time to raise their taxes.

"A lot of growers are barely hanging on and this would push them over the top," said Roffi Jarahian, who grows grapes on 40 acres outside Sanger.

The uptick in property taxes from farmland is not unique to Fresno County. Across the central and southern San Joaquin Valley, farm values are increasing even as residential and commercial properties languish.

"Ag, as a whole, is far better off than other sectors of the economy," said Thomas Kidwell, Madera County assessor. "Exports are up. Prices are up. The weather has cooperated."
The agricultural properties facing higher bills are those under Williamson Act contracts.

The 1965 law allows counties to provide lower tax assessments on farmland as incentive to keep land from being developed. The law, though, calls for the farmland under contract to be revalued according to its use, and that use can mean higher assessments and more taxes.

In Kern County, which has the second-most Williamson Act parcels after Fresno County, farmers will see an average 25% hike in property taxes, officials there reported. Like Fresno County, Kern County assessors said a lot of farmland had not been reassessed for years, a lag they attributed to limited staffing.

In Madera County, the tax roll on Williamson Act land will grow 10%. In Tulare County, officials said there would be growth but could not immediately say how much. Kings County anticipates a slight .

Fresno County's 23% increase is due mostly to higher crop values on Williamson Act land – about three quarters of the gain – and the rest to new plantings, according to the Assessor's Office.
The office Thursday had not yet calculated how many of the county's roughly 15,000 Williamson Act parcels will see higher tax bills, but Assessor-Recorder Paul Dictos said it would be the majority. Ninety percent, he said, are still assessed below Proposition 13 limits; the rest have hit that cap.

The properties getting higher bills are not limited to one area, the office reported, but they are spread across the county's east and west sides.
Land with almonds and raisins, whose values have increased significantly, will see the biggest tax jumps.

Almond growers can expect a tax increase of $16 to $25 an acre, while growers of Thompson seedless grapes can expect an increase of $8 to $10 an acre, Dictos said.
Grazing property on the east side also will see higher bills since much of that land had not been reassessed recently, according to the Assessor's Office.

The bump in farm taxes goes directly to the local agencies serving rural areas, such as the county government and special districts, including Fresno County Fire.
"With whatever potential increase in tax dollars there are, we can get back to the point where we're purchasing new equipment again," said county Fire Chief Keith Larkin. "We may be able to make slight increases in staffing."

The fire department, which is responsible for protecting 2,600 square miles, has not been able to fill vacancies or purchase a needed fire engine because of recent cuts.
The force, with about 110 full-time firefighters, is almost entirely funded by property taxes.

Schools also will see additional tax dollars from the farms, although many would see the money anyway. The state provides subsidies for poorer schools that don't reach a certain funding level, which include most schools in Fresno County.

Williamson Act parcels account for about $3.9 billion of the county's total tax roll this year, up from about $3.1 billion last year, according to the Assessor's Office.
County Supervisor Henry Perea said he was pleased to hear of the increase.

"That's our responsibility to capture every tax dollar owed," he said. "The county needs revenue to provide the services we're mandated to perform."
Supervisor Debbie Poochigian, however, worried about the tax roll growing at the expense of farmers.

"The harder you make it for agriculture to survive, the easier it will be to put houses on prime ag land, and I don't want to see that happen," she said.
After completing the tax roll Dictos said, "My decisions are predicated not on politics but doing the job right and treating all segments of our county fairly and equitably."


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