House Bill 1146 was passed by the Colorado House on Tuesday and is headed for the state Senate. Its sponsor, Rep. Tom Massey, R-Poncha Springs, expects it to pass there as well.
The Senate should approve it. HB 1146 is a small step toward curtailing egregious abuses of the states agricultural tax rate. Allowed to continue, those abuses threaten the ag tax altogether and that could seriously hurt Colorados real farmers and ranchers.
Colorado taxes agricultural land based on the value of the agricultural products it yields. The effect is to tax it at a much lower rate than other property.
That is good policy. Colorado has good reason to encourage the agricultural use of farmland. Not only is agriculture necessary to produce the food and fiber essential to life, but it benefits society in countless other ways.
From preserving open space and rural lifestyles to sequestering carbon and encouraging clean air, agriculture is good for Colorado. It is an important part of the states culture, its heritage and its economy.
Little of that applies to multimillionaire movie stars. Nonetheless, as The Denver Post reported in recent weeks, under existing law the Hollywood elite can get the same tax break as hardworking Colorado farmers and ranchers.
Goldie Hawn and Tom Cruise are two stars the Post found paying ag tax on resort property. Cruise, the Post says, lets sheep graze for brief periods each year on the land he owns near Telluride. By doing so, he pays about $400 in taxes on 248 acres for which he paid almost $18 million.
That is just not right. Not only could Cruise easily afford to pay the higher rate, his not doing so legal though it may be is an affront both to farmers and ranchers who legitimately qualify for the lower rate and to the owners of homes and businesses who pay a higher rate.
It is also taking money out of the states coffers at a time when the state can least afford it. With this, Colorado residents are essentially being told to accept cuts to schools and other needed services to benefit Cruise and others like him.
Statewide, it adds up. The Post says three development companies together own 800 acres in Douglas County on which they pay $1,160 in ag tax. Without that break they would pay $1.4 million.
Massey says his bill has been opposed by the farm lobby. They are really worried about losing their ag exemption entirely, he told the Post.
But that is backwards. The threat to legitimate ag producers is not from curbing abuses, but from the abuses themselves.
The Post has reported that 40 percent of the 54,000 properties along the Front Range with an ag exemption are owned by developers and other business interests. Faced with cuts to their schools, unrepaired roads and stories about movie stars gaming the system Colorado voters may be just as likely to throw out the entire exemption as worry about the real farmers and ranchers most suburbanites do not actually know.
HB 1146 is just a beginning. It would allow assessors to tax up to 2 acres around a house at residential rates. It does not speak to the larger problem of developers exempting large tracts as ag land.
But it is a start. And without real reform real farmers and ranchers are at risk. The Senate should approve HB 1146.
