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A Times Editorial

A galling abuse of tax breaks for land barons

At a time Florida is closing parks and cutting jobs to cope with declining tax revenues, state Senate budget Chairman J.D. Alexander is pushing to allow big landowners to further abuse an already abused property tax break. The legislation ready for final House and Senate votes could cost local governments millions of dollars that communities desperately need to avoid further cuts to child care, public safety and other essential programs. It is a galling display of misplaced priorities from a legislator who is a land baron himself.

SB 2182 and HB 981 would make it easier for developers to take advantage of a tax loophole meant to protect Florida farmers. Under current law, landowners who use their property to raise cattle or grow crops are given huge property tax exemptions — in some cases, knocking off 90 percent of the tax liability. The tax exemption is meant to recognize the public benefit of having home-grown agriculture. But if that land sells for more than three times its agricultural value, the law presumes the land was sold for development purposes and the tax break is automatically repealed.

The exemption is a fair tax trade-off given the importance of Florida's agricultural industry. The problem is that developers have horned in — plunking down a few cattle to take advantage of the tax break while they shop the undeveloped land around for commercial development. The bill Alexander is pushing would open the system up to further abuse. His bill would change the law to prevent the property from losing its tax break so long as the owner claimed the land was being used for agriculture — regardless of its sales price.

The current standard of whether the land sold for three times its value is a good litmus test of whether the property is genuinely used for agriculture. Alexander's bill would not only do away with that standard. The change would be retroactive, and apply to any pending disputes between landowners and county property appraisers. The state's property appraisers association opposes the bill, calling it back-door relief for owners of North Florida timber land that lost its tax break after selling to a company subsidiary for 12 times its assessed value.

Florida's greenbelt exemption is meant to protect farmers from facing financial pressures to sell their land. Alexander's bill would turn that principle on its head by giving developers a place to cheaply park huge chunks of property until the real estate market recovers. The law needs a clear standard for distinguishing between who is farming and who is looking for the taxpayer to subsidize private real estate speculation. The state cannot even estimate how much Florida taxpayers stand to lose; that depends on how quickly the economy recovers and how aggressively phony farmers look to build new subdivisions.

Alexander, R-Lake Wales, an executive of two companies with as much as 200,000 acres and a land development arm, is also the wrong person leading the charge. This bill would be costly to taxpayers and agriculture, but its supporters are powerful. If lawmakers approve it next week, Gov. Charlie Crist should veto it.

A galling abuse of tax breaks for land barons 04/23/10 [Last modified: Friday, April 23, 2010 6:30pm]
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