Farmers Testify Against Proposed Changes in Ag Land Taxation

A bill that would change the assessment of all agricultural land from agricultural use value to market value surfaces for deliberation by the Maui Budget and Finance Committee tonight.

The meeting is a continuation of a recessed meeting from Feb. 29 in which an estimated 300 people showed up to testify.  Committee members heard five hours of testimony before recessing the meeting last week Monday.

When the measure came to the committee late last year, Chair Riki Hokama released information saying the bill targets “gentlemen farmers,” and addresses significant tax benefits to those who use their property for agricultural purposes.

Supporters of the bill say it would address “inconsistencies” in how real property tax assessments are conducted for owners who use their property, or a portion of their property, for agricultural purposes.

“I am considering solutions to avoid “gentleman-farmers” or those who use farming as a way to obtain tax breaks,” Hokama said in the December announcement. “Reducing subsidies for agricultural use may promote parity, but the committee will also consider the bill’s unintended consequences on true farmers.”

Opponents say the bill would eliminate the county’s current “agriculture-use value” assessment, changing all agricultural lands to a “market value” assessment.  They claim it would result in increased taxes for farmers and ranchers, and “severely handicap” the farming community in Maui County.

Among those that have sent testimony and appeared at the council to testify against BF-70 include the Ag Working Group, the Hawaiʻi Farmers Union United, Kula Community Association and the Hāliʻimaile Pineapple Company.

Tonight’s meeting gets underway at 5 p.m. in the council chambers.

The HFUU highlighted points of opposition which include the following:

“We strongly oppose BF70 in its current form. This measure will make it even more difficult to be a farmer in Maui County.  This legislation puts the onus on the farmers to prove that they are farming.  We would strongly support existing land use law.  I/we strongly support regular inspections to make sure people are paying the fair share and following their county farm plan.

We respectfully point to Maui County Code, Chapter 19.30A.010 Part B which states the purpose and intent of the local law regulating the Agricultural District is to: “Mitigate rising property values of farm lands to make agricultural use more economically feasible”. We collectively feel that taxing producers at market rates is diametrically opposed to this local law. We do strongly support the dedication of agricultural lands for farming and ranching, as that is what the spirit of our state constitution and land use laws intend the agricultural district to be used for.

We (are) supportive of using qualified, agriculturally knowledgeable inspectors to assess agricultural land by the use value method.  Including knowledgeable inspectors at the assessment step is the most efficient way to ensure that the County collects the correct tax, prevents fraud and makes the agriculture tax rate available to all those who Maui County has determined are eligible to receive it.

We support residential portions of agricultural parcels to be taxed at market rates, as we understand the County of Maui needs revenue to serve its citizenry.

We support the concept of agricultural land use dedication of periods of 10 years or less. We cannot however support 20 year dedication spans. Many of Maui County’s land owners in the Agriculture District will no longer be alive in 20 years, and binding agreements post mortem are not appealing to those individuals”