As an auctioneer and a cattleman, Lt. Gov. Ron Ramsey is familiar with Tennessee’s Greenbelt Law and believes the property tax break is working as it should in the “overwhelming majority” of cases — he suspects at least 90 percent.
At the same time, he said, “I’m sure there are incidences across the state where there are unintended consequences.”
Although many legislators see no problem with the law, even praise it, Ramsey, as presiding officer of the state Senate, is willing to consider “tweaking” it to prevent abuses.
For example, the law now requires that a property produce $1,500 in gross “agricultural income” annually to qualify for greenbelt status, a figure unchanged for 20 years. Research by the News Sentinel and The Commercial Appeal of Memphis for a recent series of articles also indicates the provision is difficult to enforce.
“Maybe that’s too low,” said Ramsey of the $1,500 threshold in an interview. “We could look at raising that or, even better, make it so the local governments may police it more.”
He suggested that landowners could be required to provide a statement of income, perhaps including receipts.
“That would be fine with me and most anybody else who uses it legitimately,” he said.
Ramsey said that, in his own situation, he kept cattle for years on a 14.99-acre tract — just one-hundredth of an acre shy of meeting the minimum acreage required for greenbelt status. After his father’s death in 2010, he acquired adjoining land that put his holdings above the threshold and allows him to qualify under the law.
He currently has one Angus bull, 15 cows and 15 calves on the property, he said.
Ramsey is one of 22 state legislators who have property qualifying for a greenbelt tax break, all of whom appear to have legitimate farming operations.
Gov. Bill Haslam and House Speaker Beth Harwell are less familiar with the law, but indicated a willingness to consider changes.
Haslam declined to be interviewed on the subject, though an aide said the administration is familiar with the series of stories on the Greenbelt Law that recently ran in the two newspapers.
“At this point what we’ve seen is what’s in the articles, which made it seem like there were instances where the intent of the law was not being met. Beyond that there’s not much more to say right now but that the governor thinks the issue is worth taking a look at,” said Haslam spokesman David Smith, adding that it is “premature” to say what will be in the governor’s package of proposed legislation for next year.
“This is a complex program that was originally designed to protect farms, open spaces, and other wildlife habitats — an objective with which I agree,” said Harwell in an email. “The recent article highlighting it has brought to the attention of lawmakers the inconsistencies in enforcement and application around the state.
“We will do our due diligence in researching best practices and what other states do with similar programs. As with most state programs, there is very likely room for improvement,” she said.
Any bill to limit the scope of the Greenbelt Law will likely face the formidable lobbying opposition of the Tennessee Farm Bureau Federation. Rhedona Rose, a bureau vice president who leads its lobbying efforts, said farmers believe the present system is generally working well.
Indeed, Rose said some provisions of the current law are unfair to farmers.
A present provision says that, if a property under greenbelt status is taken out of agricultural use, there is a “rollback” of the tax break for three prior years, meaning the property owner must pay the local government back the revenue lost from greenbelt for that period of time. There have been some suggestions that the rollback be expanded to a longer period, but Rose said any rollback at all is unfair in many cases.
If a farmer dies after holding property a lifetime, meeting all greenbelt rules, the law met its purpose and it is unfair to make the farmer’s survivors pay extra taxes when they sell the property, she said.
Further, Rose said the present cap on how much land can be placed under greenbelt status — 1,500 acres — is unreasonably low in West Tennessee, where many farms are of larger acreage. A higher cap would be in order, she said.
Ramsey said he can see the seeds of a potential compromise in this — perhaps raising the cap in exchange for an increase in the $1,500 “agricultural income” requirement.
As an auctioneer, Ramsey said he often deals with the sale of land that has been farmed for a lifetime — or more — but sold after the death of the farmer. He agrees with Rose that, in that case, a rollback is unfair — though it may be warranted in the case of a land speculator holding the property for development. If there was a way to legally draw a distinction between the situations, he said, a change in the law to implement it could be appropriate.
Lobbyists for city and county governments, which depend on property taxes for much of their revenue, were cautious in commentary when asked whether they would like to see changes in the law.
“Greenbelt is a legitimate property tax break for our agricultural community,” said David Seivers, executive director of the Tennessee County Services Association, an umbrella organization for county governments statewide. “Any time we can eliminate any abuses in programs like this we can take pressure off the rates other taxpayers are required to pay for local services like our schools.”
Margaret Mahery, executive director of the Tennessee Municipal League, which represents city governments, said the Greenbelt Law has not been a topic of much recent discussion among city officials, but it may come up during meetings over the next few weeks as TML leaders set an agenda for the 2013 legislative session.
While stressing that she and TML have no quarrel with “the farmers who produce our food,” Mahery said, “I would expect legislation (on the Greenbelt Law) will come up in some form or fashion this year.”
Local property tax assessors, who are responsible for enforcing the Greenbelt Law, also have an organization. Will Denami, executive director of the Tennessee Association of Assessing Officers, said the group’s leaders will also be discussing a 2013 legislative agenda in the coming weeks.
“I think the Greenbelt Law is a well-intentioned, good program,” he said. “It is something our policy committee is going to discuss next month.”