Earn money from the land, not tax breaks

U.S. Rep. Jon Runyan
U.S. Rep. Jon Runyan
Posted: June 26, 2012

On Trenton's legislative calendar, amid vying tax cut plans, is a smart bill that would curtail a decades-old property tax scam.

It requires landowners to make at least $1,000 a year from their farmland to get a whopping 98 percent property tax break. The theory is that real farmland produces real income, and raising the threshold from $500 a year to $1,000 a year would weed out what cosponsor Sen. Jen Beck (R., Monmouth) calls "fake farmers." The bill would return 47,377 acres of farmland to the tax rolls, generating about $2 million.

The tax exemption was created in 1964 to protect the Garden State's shrinking farm acres, and it is still a good policy. Farmland brings in income, and it also serves as a sponge in a state with so many impervious surfaces that most rainstorms quickly turn into flood watches.

However, too many landowners use the break to preserve their personal income rather than their land.

Most of the tax abuse happens when owners sell a few cords of wood or some Christmas trees to themselves or their neighbors and claim the exemption, leaving residential and business property owners in their communities to make up the tax difference.

Among those who've famously taken the exemption are former Gov. Christie Whitman, who used a farmland exemption on her Far Hills estate for cutting Christmas  trees, and former Eagles tackle and U.S. Rep. Jon Runyan (R., N.J.) who gets a break on 20 acres of his Mount Laurel homestead because he breeds miniature donkeys and sells firewood. Developers often claim farmland exemptions while they sit on property and wait for the market to go up so they can build.

If elected officials are genuinely interested in property tax reform, passing this bill is one way to show it.

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