Agenda - 04-21-1998 - 10a - Laserfiche WebLink

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In some counties without the outside influence of development, it was possible for farmland to be worth $500 per acre. However, with a new road and availability of public utilities (water and sewer), that same land might suddenly be worth $5,000 per acre. Following the move of several commercial or industrial properties to nearby sites, the value of the farm property, though unchanged as to its use, would continue to appreciate rapidly. It was only a matter of time before the farmer accustomed to paying taxes of $1.50 per acre (based on a $500 value and a $.30 tax rate), would begin to question his ability to survive as a farmer, especially as his taxes started to rise to $15 (based on a $5,000 value and a $.30 tax rate) and even more. Not surprisingly, prior to the creation of the Use-Value Advisory Board, the majority of the public pressure and appeals arising from reappraisals came from the rural property owners especially farmers, in response to the "shock" of the new assessments. The enabling legislation was designed to not force the farm family off their land because of property taxes. As passed, only individuals could apply and if they did not live on the property for which they were applying, they had to have owned it for seven years. The penalty for either selling the land or converting it to anon-qualifying use was severe; afive-year roll-back provision. Another primary requirement was that the land had to have highest and best use other than its present use as agricultural, horticultural, or woodland. Following enactment of the present-use value legislation, some of the reappraisal "shock" began to be eliminated for owners of qualifying property. The shock shifted to other classes of property- especially single-family residential, and general commercial/industrial properties. Though not able to avail themselves of the benefits of the program for present-use value, they were nonetheless forced to contend with escalating land values. Numerous amendments have changed the scope and direction of the early legislation. Virtually every session of the General Assembly has addressed a change or amendment to the general statutes that deals directly with present-use value. New classes of ownership, less restrictive periods of ownership, and more owner-friendly requirements have greatly increased the potential number of participants and reduced the tax base. The manner by which a property may be deemed qualified has broadened while the average present-use (assessed) value per acre has dropped. As present-use value schedules are typically much lower than market value schedules for the same land, virtually all land will receive significant tax breaks if it meets the requirements of the program. Dropping the requirement that the property have a higher and best use different from its present use, coupled with the lower present-use value schedules, has opened the program up to a greater majority of land owners. Among the more significant legislative changes have been the relaxing of the ownership requirements (now open to certain corporations, limited-liability companies, and trusts), the statutory mandate of a 9% capitalization rate, a move to the "unit concept" to include small tracts that might not otherwise meet the program requirements, and the creation of the Use-Value Advisory Board. Given the continuing appreciation in the market value of land, these changes have resulted in anever-widening gap between assessments for market and present-use value.