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.”
Two Knox County golf courses have lost their property tax breaks, reports the News-Sentinel. Cherokee Country Club owes $324,385 in back taxes, according to the Knox County Property Assessor’s Office, a fee applied after it recently lost a tax benefit reserved for Tennessee’s open spaces.Holston Hills Country Club will owe $53,301.
The clubs have enjoyed tax subsidies since 1983 through classification as open spaces by the property assessor, under the state’s Greenbelt Law for agriculture, open space and forestry.
After a News Sentinel inquiry to the Tennessee comptroller of the Treasury on whether the golf courses should be considered open space, general counsel Robert T. Lee wrote in an opinion Sept. 26 that “golf courses cannot qualify for open space.”
In 2011, Cherokee received a $28,921 tax break and Holston Hills took a $3,496 tax break from Knox County. The intent of the Greenbelt Law when it was implemented was to protect farmers from being taxed off their land and encourage more open space and forested areas.
Knox County Property Assessor Phil Ballard said his office will comply with Lee’s opinion, and added that a five-year rollback would be applied right away. He said that attorneys representing both courses have contacted his office.
They could have waited to the reappraisal in 2013 to pull the golf course properties out of greenbelt but, “we went ahead and done it,” Ballard said.
Mark Moon, chief operating officer at Cherokee, said the board of directors would meet this week and he expects to discuss losing greenbelt status and the rollback.
“This kind of came out of left field for us,” Moon said.
The News Sentinel and the Commercial Appeal, in a joint review of “Greenbelt Law” records, report some of the state’s wealthiest individuals are getting big tax breaks under a program designed to help farmers preserve their land for agriculture. The 1976 Agricultural, Forest and Open Space Land Act, or “Greenbelt Law,” is subsidizing estates and hobby farms of business icons such as AutoZone founder J.R. “Pitt” Hyde, a Memphis multimillionaire, and some of the biggest names in country music, Wynonna Judd among them. Former University of Tennessee football coach Phillip Fulmer qualifies by baling hay on his $2.8 million, 47-acre Maryville estate.
Generous farm and forest tax breaks are in force for estate after estate along Nashville’s tony Chickering Road, though official paperwork at the Davidson County Assessor’s Office at times provides little evidence of how the properties qualify. Among the recipients: former Tennessee Gov. Phil Bredesen, a wealthy health care entrepreneur; and billionaire Thomas Frist Jr., co-founder of Hospital Corp. of America.
Even Knoxville’s private Cherokee and Holston Hills country clubs have been sheltered under the “open space” provision of the law.
In some instances, the law is actually subsidizing the land speculation it was created to combat.
In 2009, for example, Shelby County’s Johnson cut 97 percent from the value of an East Memphis field for sale for commercial development and surrounded by a 127-room Hyatt Place Hotel, ServiceMaster offices and a strip shopping center. Annual taxes on the $2.99 million, 65-acre site owned by Forest Hill Associates loomed at more than $48,000 if taxed at fair market value, yet fell to less than $1,000. Now, an apartment complex is under construction there.
“We’ve done what’s right within the law,” said co-owner Charles Wurtzburger.
Maybe so, with many saving big on this huge break many others are carrying the tax load.