Tax Plan Could Force Some Farmers Out Of Business
The only way you won’t pay more taxes under the $1.2 billion tax increase proposed by Gov. Bob Riley is if you don’t live in, or do business in, Alabama. Even though the governor promises taxes for some families will be reduced, if those families drive an automobile or buy goods and services in Alabama–they will pay more.And while some of the tax calculators found on websites supporting and opposing the tax will tell you what you can expect to pay, chances are you won’t really find out until you’re forced to pull more money out of your wallet.For a farmer like Russell County Farmers Federation President Ben Bowden, Riley’s tax package could force him to sell some of his land or go out of business. Bowden said his taxes would increase 700-800 percent.”One of the provisions in the tax increase proposal, penalizes farmers who own more than 2,000 acres,” Bowden said. “Because there are no caps on appraisals of acreage over 2,000 acres, I’m at the mercy of my tax assessor. Without a formula, personalities might prevail.”Bowden and his son-in-law, Charlie Speake, farm 6,800 acres in and around Russell County in east Alabama. They farm 4,000 acres of cotton, 930 acres of peanuts, have 3,600 acres of timber and 300 head of cattle. The farm has 12 full-time employees and conservatively, Bowden estimates the plan could force him to pay an additional $50,000 annually in taxes. Or more likely, it could put him out of business, he said.”It’s crazy to think that because a farmer has more than 2,000 acres that he should be taxed at a higher rate,” Bowden said. “Sure we farm more, but we have a lot more at risk than some smaller farmers, and a lot of them have some other form of off-farm income to help support their families. If some of my land is near a subdivision that’s selling lots for $6,000-$7,000 an acre, there’s no way I could farm enough to pay the taxes on that.”Under current use laws already in effect in Alabama, if a landowner sells property that is developed within three years of the sale, the landowner’s property tax is retroactively reassessed at the new, higher value for those three years. That’s the assurance that current use provides, Bowden said. If row crop farming does become successful, there are provisions for the land value to increase, he added, noting that land value for timberland in Alabama has increased twice in the last decade.”Somehow, someone has told the governor that farmers have the ability to pay more taxes–a lot more taxes–and that’s just not so,” Speake said. “I see this entire tax package as a smoke-and-mirrors game. Campaign Alabama wants us to send more money into the same system–the same corruption we’ve always had. I don’t see anything they’ve done to instill confidence among Alabama voters to approve such a sweeping plan, but the real fact is that most folks just can’t afford it.”Bowden said many large farms lease or rent equipment, and under Riley’s plan, that would cost more as well. But the largest unknown is what his land over 2,000 acres will be assessed at.”We can’t even figure what that will cost, and it’s really scary,” he said. “If Riley’s plan passes, it’s going to put all the bona fide row crop farmers out of business. Once land is forced on the market, the price will drop.”Land in Alabama really has only two markets–development and recreation–according to Bowden. Farmers typically don’t buy land. If they acquire more land to farm, they usually rent it. If property taxes on rented land go up, the landowner simply passes that increase on to the farmer.But Bowden said he’s not in favor of smaller farmers paying more taxes either, adding that they don’t have the ability to pass on such increases. Until real reform is seen, he doesn’t believe most people will vote to pay more taxes.A recent survey of leaders of the Alabama Farmers Federation indicates that most farmers agree. An overwhelming majority–84 percent–opposes the tax-increase plan.The only tax increase proposed in the governor’s tax plan that was favored by the group of over 500 respondents was an increase in cigarette taxes. Of those surveyed, 62 percent favored an increase in taxes on cigarettes.The highest opposition to Riley’s 10-item tax package came from those like Bowden who oppose an increase in property taxes. Eighty-five percent of those who participated in the survey said they oppose Riley’s plan to increase property taxes.The Alabama Farmers Federation Board of Directors voted at its board meeting June 30 to officially oppose the package.