Rep. Vicki Kraft: Let our aging farmers and their tax burdens retire
If you want to understand the importance of farming, take a quick look at your dinner plate. Generations of farmers have produced food not only for Americans, but for people throughout the world. U.S. farms sold nearly $395 billion in agricultural products in 2012.
According to the Washington State Department of Commerce, more than $15.1 billion in food and agricultural products were exported through our state's ports in 2013. The diverse climate and rich soil of Washington makes it one of the most productive agricultural regions in the nation. Our farmers and ranchers steward more than 15 million acres of land in Washington. I have a deep respect for the work they do to put food on our tables.
Farming is not only labor intensive, it is unpredictable year to year due to unforeseen weather issues or supply-side impacts such as rising fuel costs which can impact farmers' profits; in short, it's hard and risky work. Moreover, the challenges for farmers are growing as the age-wave has reached the family farm. A generation of aging farmers will retire in the next several years. According to a 2012 USDA Census of Agriculture, more than 12 percent of the total number of U.S. farmers are 75 years or older, and a whopping 33 percent are more than 65 years, the traditional retirement age.
Retirement is part of a natural career growth process spanning over several decades. A great deal of thoughtful planning is necessary to make the change from full-time work to a meaningful retirement. Farmers, just like other occupations, deserve an unrestricted pathway to retirement. Although farmers have a high degree of freedom and flexibility when it comes to running their farms, they may feel their ability to retire is constrained. Many of these retirement-age farmers are finding it extremely difficult to structure their retirement income with the scaling back of daily operations.
In 1970, Washington state passed the Open Space Taxation Act. This law allows farm and agricultural land, including timberlands, to be valued based on its “current use,” rather than at market value – so the land is appraised at what it is used for, rather than its highest market value. Clark County has 69,398 acres of land in current use status. However, when land is removed from this status, it is subject to seven years of tax, interest and penalty.
For senior farmers, that means when they decide to retire and sell their land, they must pay seven years of back taxes and fees based on the land's highest market value. Deciding to retire is not always easy. For some farmers, this law is making it even harder.
Recently a local area hay farmer, who at 80-years-old had more than reached the age for retirement, asked me for help. Although he was no longer able to actively work his land, he couldn't afford to remove it from its current use status. The fees and penalties were too great. As a result, he must produce hay at a loss to stay within the current use status.
During the 2018 session, I will propose legislation that would permit retired farmers, or those seeking to retire, to be allowed to remove their land from current use status without being subject to additional tax, penalty or interest. My bill would only apply to farmers who worked their land for 10 years or more and had reached the age of retirement of 60 years old, or for reason of disability were no longer able to work their land. In addition, veterans with a disability rating for a service related injury would also qualify.
Whether we are farmers, manufacturers, teachers, or whatever it is that we do, there comes a time we are no longer able to work. My bill would apply the same type of criteria as many other professions, to farmers, giving them the opportunity to rest from their labors and the land they cultivate.
As always, please feel free to share your ideas, comments about this proposal, or other state government issues, with me. You can reach me by email me at email@example.com or call (360) 786-7994.