The Legislative Auditor released two interesting reports last Friday. We told you yesterday about JOBZ's suspect tax breaks. David Peterson has the story about the Green Acres Program:
Minnesota's 40-year experiment with protecting farmers on the urban fringe has silently spiraled into a vast tax-avoidance scheme that shelters $10 billion worth of land in ways that almost certainly are unintended and unfair – while doing little in the end to truly preserve farmland...
The idea behind the legislation was to protect agricultural land from rising property taxes that might drive farmers out of business as urban growth jacks up the value of their acreage.
A noble goal, and it apparently works for some farmers who want to continue farming.
However, Legislative Auditor James Nobles reported that in practice, the law winds up giving a huge tax break to developers who are holding land strictly for future subdivisions and Taco Bells.
The report notes that the developers taking advantage of the program may get away paying one-tenth or less the normal tax liability. With $10 billion in land being sheltered, $40 million in taxes get shifted to other taxpayers.
Hobby farms and acreage leased to real farmers might qualify under a generous interpretation of the law, but the auditor says 38 percent of the land claiming the break isn't even tillable.
The program doesn't really protect agricultural land long term; meanwhile, guys in suits are harvesting greenbacks.
The report is available here.
