Change to 'Green Acres' might raise some rural taxes

About 900 farmers in Washington County are enrolled in the "Green Acres" program, which allows them a break on their property taxes. A recent change in Minnesota's tax law means "nonproductive" portions of land once eligible under Green Acres now will be taxed at their full estimated market value. The change came after a legislative auditor's report said that some developers in Minnesota were using Green Acres as a tax-avoidance scheme, harboring high-value land under the program's lower taxation. Changes will be discussed at a public meeting Oct. 1 at 6:30 p.m. in the county board room at the Washington County Government Center in Stillwater. Kevin Corbid, Washington County's director of property records and taxpayer services, explains further:

Q How has Green Acres changed?

A Under the old law you had to have at least 10 acres under production, the primary use of the property has to be agricultural, and you had to have an income stream of a certain amount to qualify. Now the big change for this year says property eligible for the Green Acres program is only productive agricultural land. It's tilled, it's actively pastured or mowed for hay. Under the old law, if you had enough of that productive land to qualify, you could also include the nonproductive land -- the wetlands, waste area, regular woods area -- property that's not being actively farmed.

Q What can landowners currently enrolled in the program do?

A They can choose to "grandfather" those nonproductive acres, meaning they remain at the lower Green Acres value of $1,500 an acre but will be subject to annual county tax increases. This approach has other conditions, too, such as being assessed deferred taxes if the land is withdrawn, sold, transferred or subdivided after Jan. 2.

All Green Acres enrollees have been mailed letters from the county assessor describing financial alternatives.

Q Does the Green Acres program include all agricultural land in Washington County?

A No, you can be an agriculture-classified property and not qualify for Green Acres. If you have a large parcel and the agriculture use is minimal, the decision might be made that the primary use is residential and that would make you ineligible for Green Acres. Of the total 3,600 agricultural parcels of 94,000 acres in Washington County, 1,937 are in Green Acres for a total of 60,248 (acres).

Q When do changes take place?

A This takes effect toward the 2009 assessment which is finalized on Jan. 2, 2009, and will be reflected on property taxes payable in 2010. On the 2009 assessment we'll make some decisions on the classifications and breakdowns in Green Acres.

Q Does Washington County have any more or less of this land than other east-metro counties?

A We have a considerable amount of Green Acres land that's concentrated in the northern part of our county in Scandia, Forest Lake, Hugo, Stillwater Township, part of the Grant area, and in the southernmost part of the county in Afton, Denmark Township, Cottage Grove. I suspect we have what's very similar to what you see in the southern part of Dakota County that's a little less developed and in the northern part of Anoka County.

Q If a portion of a land is not in a productive state under this new tax law, the value would rise and therefore the taxes, is that the rule of thumb?

A Yes. The idea is that the Green Acres law is supposed to provide a benefit to those folks whose land, not as agricultural, would be worth more than their land as pure agricultural land. So yes, it's fair to say that nonproductive land is being valued lower under the Green Acres program than when it's pulled out.

Q How do you think this might go over with property owners in Washington County?

A I suspect they're not going to be pleased. Whenever we have conversations with individuals about their property, either qualifying or not qualifying for the program, it's very sensitive. [Green Acres] is a fairly significant tax break for folks. We want to make sure we're being consistent and equitable in how we administer it. There are probably not a lot of good choices for individuals. They're going to see it as what are the least onerous choices they can make.

Q Is there an advantage to landowners planning to put that nonproductive land on the market?

A When a landowner goes to sell their property they don't really peg it on what we've got it assessed at. They get an analysis done by a Realtor and get a market appraisal. Normally we don't hear that folks are happy that their value is being raised, therefore they can sell it for more. That's not a comment we hear very often.

Q What questions do you anticipate in the public meeting?

A I anticipate that most folks will have questions that are very individualized to their property. They'll want to look at a map and say here's what I'm doing here, what's going to happen? What's your thinking on how much is productive vs. nonproductive? They'll want to know why we're doing this, what the financial impact is and what does it mean to my property?

Q What about specialty uses of agriculture land?

A It's a pretty small part. The Christmas tree farmers, the truck farmers, individuals who board horses as a business. Those types of properties will be reviewed to make sure we classify them correctly.

Q Where should people call for help?

A Anyone with questions should call the assessor's office at 651-430-6175.

Kevin Giles • 651-298-1554