The Real Silent Killer Of American Farms? Property Taxes

America is constantly worried about the farmer. American politicians of every political party tries to assure voters they are a friend of the farmer’s. Republicans, Democrats, even the socialists. The farmer is the unknown hero to most Americans; they provide us food, though we will likely never meet one. Without the farmer, we would never eat. How fortunate Americans are to have farmers.

But while American voters and politicians alike try so hard to convince themselves that they are so very appreciative of the farmer, they do nothing to combat the actual problem killing American farms: property taxes.

Nationally, 1.92 million farmers paid $9.4 billion worth of property taxes in 2017, up $2 billion from five years earlier, a 21.3% increase. The average property tax paid by farmers nationally was $4,902 in 2017, compared to $3,752 per farm in 2012.

The Pew institute just recently wrote an article on how property taxes sink farmland owners. In the longrun, this costs American families more money in food and groceries.

The Pew institute’s article writes how the Schmale family has 4500 acres of farmland in western Nebraska and 160 acres of land in eastern Colorado, straddling both states. Amazingly though, Schmale pays exorbitantly differently tax bills on each side of the border.

“The last time I ran the numbers, I was paying somewhere close to five or six times as much in Nebraska than I was paying in eastern Colorado,” Doug Schmale, a third-generation wheat farmer, told the Pew Institute reporter. “And the better land, and the better school system, is in eastern Colorado.” 

“I wish more than anything else that I could leave the state of Nebraska and move my farm to another state,” Schmale said. “Almost any state would be better than here.” 

One family that left Nebraska for Missouri to escape notorious Nebraska property taxes

But there’s worse than Nebraska. The Northeast is particularly terrible, and gets worse an worse each year.

“It has to close so we can survive.” These are the words of farmer Frank Hull. He and his wife own and maintain the 260 acre Hull-O-Farms in Catskill, upstate New York. They’ve done this for 50 years. The farm has been in Frank’s family for 240 years and 7 generations. It will now close down.

“We don’t want to leave the land,” Ms. Hull said. “But we’re running out of options.”

The Hulls were interviewed in a New York Times article on their decision to close and sell. insurance, labor costs, maintaining the property, and equipment costs were all factors in their decision to close, but the number one on their list: property tax.

In 2017, when the last federal agriculture census was taken, the average age of a farm owner or manager was 58.6, more than 8 years older than in the early 1980s. That year, there were 2,042,220 farms in the country, representing a loss of 173,656 farms over the previous two decades.

Also from that census was found that:

 in 2017, 43,000 Nebraska farmers paid $686.5 million in property taxes, a 43% increase from the previous census in 2012, and a 206% increase from 1997.

(The census figures reflect property taxes paid by producers for the farm share of land, machinery, buildings and livestock. They exclude taxes paid by landlords, which would result in significantly higher figures.)

By comparison, 37,000 Colorado farmers and ranchers paid about $129 million or $3,500 each. Nebraska farmers paid nearly five times as much, both collectively and individually.

Only two states collected more property tax from farmers than Nebraska. In California, 65,000 farmers paid $1.1 billion, or roughly $17,300 each.

In Texas, which has no state income tax, 236,000 farmers and ranchers paid $698 million, or roughly $3,000 each. 

Following Nebraska are Iowa ($538 million), Illinois ($432 million), Ohio ($412 million) and Minnesota ($403 million). 

Nationally, 1.9 million farms paid $9.4 billion in property taxes, for an average of roughly $4,900 per farm.

Five years earlier, 2 million farms paid about $3,800 each. Between 2012 and 2017, property taxes overall increased about 27%.

And as property taxes squeeze out farmers, it has caused another problem: the aging of farmers. With the burden becoming too much to make farming worth the trouble, many children of American farmers are opting out of the family business, leaving no one behind to take over. It’s a potential national crisis. For the Hulls in New York, 2 children moved out of state and 1 who was most likely to take over the farm died in a tragic car accident.

As of now, the future looks bleak for American farmers. The average age of the farmer continues to rise, and the number of farms continue to decline. Americans in urban areas rely on their food, but hold the voting advantage, and tend to vote for politicians who increase state taxes, not decrease.

So what can you do to help American farmers? Ask your local Representative what they plan to do to lower state property taxes. Until that happens, we may have a future farm crisis worse than anything we’ve seen.


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