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Another Decade of Farm Tax Breaks up for Vote

Posted Thursday, February 16, 2023
PressRicketson Farm

By Tommy Gardner. Published by the Stowe Reporter on February 16, 2023. Original link with pictures found here.

A decades-old Stowe property tax exemption has ensured that, even as development spreads throughout town, it still tends to end where farmers’ fields begin. Voters will decide next month whether to let those agrarian tax breaks continue for another decade.

“There wouldn’t be no farmers in Stowe if it weren’t for that,” Paul Percy, one of Stowe’s most prominent dairy farmers, said of the “farmer’s contract” up for a vote on the March 7 Town Meeting Day agenda.

Under the contract, which was implemented in the mid-1970s, participating Stowe farmers are taxed at a flat rate based on a reduced property assessment of $200 per acre enrolled in the contract, which is less than half of what the state taxes agriculture property enrolled in the current use program — as of last year, the state taxes such land based on an appraisal of $429 per acre.

Town property assessor Tim Morrissey said the town will almost certainly increase the tax in the next round of contracts, if voters approve the measure. Still, it will still be less than the state and much less than fair market rates.

“We’ll take a look at it, and it might be in the $300-per-acre range, which means it’s still pretty cheap,” Morrissey said.

Les Pike, owner — along with wife Claire — of Keewaydin Farm on the south end of town, said his family has been involved in the farmer’s contract for decades, a long time by many standards but a blink of the eye for the farm, which has been around for more than a century. Pike said the contract makes a huge difference on farmers’ property tax bills.
“For 101 years, the farm has been in the family, and I can’t see that continuing if we have to pay property tax on fair market value,” he said. “The farmers in town who sign this contract have been here a long, long time and are not interested in selling their farms at fair market value."

The farmer’s contract model was devised in the 1970s, and credit is given mainly to Gerard Kirchner, a former town lister and conservation-minded Stoweite — he’s the namesake of the popular, and protected, Kirchner Woods. Les’s father Mert Pike worked closely with Kirchner on the plan.

The contracts served as blueprints for the state’s current use program, which was implemented in 1978, a few years after Stowe first adopted its farmer’s contract model.
Pike said he prefers the local plan to the state’s current use program.

For one, lawmakers have considered cutting funding for its program, and Pike worries it is growing too fast, with too much land being added to it each year, for it to be sustainable.

Another big reason: farmers who enroll in current use not only face penalties if they pull out of the program, but the state also places a lien on the land. The town farmers’ contact does have penalties, but there’s no lien on the land.

Third, Pike said if any forest land is enrolled in current use, that wooded land must be managed by a state forester.

“Farmers want to be able to manage their own land,” he said.

There are penalties to pulling out of both programs. The state charges farmers 10 to 20 percent of the property’s value, depending on how long it’s been in current use, as a penalty. Morrissey said Stowe charges the property owner three years’ worth of back taxes.

Morrissey said farmers seem to enjoy the local control versus state control. The town doesn’t put a lien on the properties and the 10-year contracts provide a sense of stability the state might not be able to match.

“The state could always change the way they do things,” he said.

Morrissey said there are reasons to favor current use, primarily because under the state program, property owners with farm and forest land can also apply to have farm buildings like barns and milking parlors exempt from taxation.

“The farmer’s contract does not do that. It’s just on the acreage,” he said.

A lot has changed in the 10 years since voters last approved the farmer’s contracts.

In 2013, the town budget was $10.2 million and this year it’s $16.6 million. The grand list — the value of all taxable property — grew by nearly a quarter of a billion dollars and last year rang in around $2.25 billion. Additionally, the population increased by about 21 percent.

In other words, Stowe has gotten more expensive and more crowded, and the question of whether to re-up the contracts for another decade could make for a lively Town Meeting Day conversation, especially since there are countless new people who moved to town during the pandemic who have never participated in a good old-fashioned annual meeting.

Morrissey said it was “overwhelmingly approved” in 2013, especially after Pike got up and entreated his neighbors to show some love for the farmers who protect the agrarian landscape and ethos.

However, the tradeoff in making it easier for farmers to continue to work their land is other property owners shouldering more of the tax burden, however small. Morrissey said, currently, the tax break effectively removes about $5.6 million from the grand list and adds about .0049 cents to the tax rate.

“Less than half a penny,” Morrissey said.

Pike said the obvious benefit for farmers is it allows them to keep their land in agriculture. As for the rest of the community?

“It depends on how much they want farms in their town,” he said. “If people want this to continue, if they value farming or feel it’s a good thing for tourism, then that value is certainly there for them. If they want to see farmland developed, then they can vote no.”

The farmer’s contracts are supported by the most recent Stowe Town Plan, which was adopted in 2015. The plan notes both the decline of farming in the modern age and the pressures on Vermont farmland being ever encroached upon by development.

“The tax stabilization program and land conservation efforts are important means of protecting the remaining land base for agriculture. Such efforts, however, will not ensure that farmers will continue to manage protected farmland for agricultural purposes,” the plan states. “The town may need to explore additional incentives to support farming in Stowe, and to maintain the remaining agrarian elements of Stowe's landscape.”

Right now, there are four farmers with contracts — Percy, Pike, Ken Ricketson and Arthur and Lawrence Morrill. It is uncertain which farmers will re-enter the contracts with the town.

The Percy family has four of its farms enrolled in the program, but a barn fire last year at the Weeks Hill family farm destroyed the barn and killed all the cows and operations have not recommenced there.

The Ricketson Farm, located on Route 15, was put into conservation last year by the Stowe Land Trust, raised $2.5 million to put a permanent conservation easement on the 217 acres, protecting it from developments. But the owner sold off his dairy herd in 2020.

As for Pike? He said his family is certain to re-up if voters give their blessing. If not?

“I’m looking out at a 36-acre field right now,” Pike said recently during a phone conversation. “And if I have to look out and see hotels and whatnot, I would leave the town of Stowe.”

[Updated Feb. 21 to clarify that property enrolled in farmer's contracts and current use is taxed on reduced appraisal values.]