A view of southern Blaine County’s
premiere open-space agricultural lands from Timmerman Hills. Express
photo by Travis Purser
He argued to the State Board of Tax Appeals, the body
considering the landowners’ grievances, that agriculture in Blaine
County is essentially dead. Therefore, so is the right to claim a tax
break for it, in some cases even for people raising crops or livestock.
For Mann, Haught’s argument was a self-fulfilling
prophecy—higher taxes would speed the demise of an already financially
difficult, yet still-viable and legitimate, occupation. And, she felt, the
argument contradicted efforts made by the county planning department to
preserve agriculture here.
Haught works in the basement of Hailey’s old Blaine
County courthouse, surrounded by maps and reference books. He constantly
cites them while he explains the intricacies of property appraisal, a
subject for which he has considerable enthusiasm.
He is not only responsible for determining the value of
the land on which people in Blaine County pay property taxes, he is also
the mayor of Shoshone, in Lincoln County, and a failed farmer himself.
So he’s aware that Blaine County is different from other
parts of Idaho.
Here, the price of land is so high, he believes, that
"buyers will never get a return off their money by farming," and
therefore, the actual use of so-called agricultural land is
"residential with room for hobbies."
"The reason that some claim the agricultural
exemption is to…lower their property taxes," most paying less than
$1,000. To illustrate the inequality of that, he said, "I’ll tell
you what I pay in Shoshone on four [city] lots (his personal property). I
pay $1,200."
The official justification that Haught gives for the tax
increase is intricate. A written account of it that he presented at the
Dec. 5 hearing is six, single-spaced pages long and packed with arithmetic
and references to Idaho tax code.
But the crux of his argument is a new definition of
agricultural "home site," an expensive part of the tax
assessment equation for landowners.
Until last year, all agricultural land that didn’t have
"residential improvements" was eligible for an agricultural
exemption—what was left was the home site, taxed at a higher rate.
In 1999, the state Legislature changed the definition of
"home site" to include all the structures on a farm or ranch and
all the land not used for agriculture. That made even barns and machine
shops part of the home site, and part of the higher rate. The average
valuation of a home site in Blaine County went from $17,000 to $130,000.
Before the change, people with agricultural parcels south
of Bellevue who had been leasing their property for marginally profitable
hay or barley production did so largely for the agricultural exemption
they could claim. Now, with the new "home site" definition,
claiming the exemption might no longer save money, or it might even cost
money, depending on the complexities of tax law and the way it applies to
a particular piece of property.
The change has serious implications not only for
landowners. If the new rules discourage the leasing of land, farmers who
depend on it may have a difficult time finding places to grow their crops.
During a break in the Dec. 5 hearing, Mann telephoned the
local media, outraged at the apparent contradiction between what Haught
was arguing and another project the county is working on called
Transferable Development Rights. The so-called TDRs, if implemented, would
be aimed at preserving agriculture in southern Blaine County by shifting
development to city areas. Rep. Wendy Jaquet, D-Ketchum, and Sen. Clint
Stennett, D-Ketchum, had cleared the way for the system by getting state
legislation for it passed in 1999.
Pushing carrots and sticks
A panoramic photograph of the Bellevue Triangle’s
wide-open agricultural spaces with the snow-covered Boulder Mountains in
the background is pinned to the cork board in county planner Tom Bergen’s
office.
Bergen works two stories above Haught in the same county
building, but he has different ideas about farming and ranching.
When asked why he thinks it’s important to preserve
agriculture in Blaine County, the first answer he gives is, "the
view," not only for its aesthetic qualities, but also for the tourism
it encourages.
He also thinks having a "mixture to the local
economy" is desirable and that there needs to be a "critical
mass [of farming and ranching activity] for agriculture to remain
viable."
Of course, there are many more reasons contained in the
studies, books and files that line his office walls. There’s the public
cost of providing services like utilities and fire and police protection
to rural areas if they become densely populated neighborhoods. There’s
the added commuter traffic on Highway 75. There’s the added demand on
water resources. There’s the ugly sprawl that would likely occur as
agricultural land was subdivided and sold to developers.
Bergen would like to preserve Blaine County’s
agriculture, and he thinks a well-crafted TDR system might be able to do
that.
The basic principle of TDRs is not new. The idea of
separating development rights from other property rights on historically
or environmentally sensitive land so that the development rights could be
sold began in the early 1900s. New York City adopted the first official
TDR program in 1968 with its Landmarks Preservation Law. Since then, the
system has gained popularity in rural America. Fremont County and Payette
County in Idaho currently have TDR systems in place, and 12 other Idaho
counties, including Blaine, are working on creating their own systems.
One of the major advantages of TDRs is that they offer a
politically acceptable way to preserve farmlands and other sensitive
areas. Areas like Blaine County that impose zoning restrictions on density
and type of development risk, and are often criticized for, taking
landowners’ rights without compensation. Landowners have sued, and won,
over the issue.
An agricultural TDR system would offer landowners a
choice: build on farmland at the zoned low density, or sell the rights to
build and continue farming the land under an open-space easement or deed
restriction. That choice would occur in a "sending" area.
Developers in areas that may be better suited for higher
density, called "receiving" areas, would be allowed to purchase
the development rights. Receiving areas under consideration in Blaine
County include mostly Ketchum, but also Hailey, Bellevue and
unincorporated county land between the cities.
While TDR systems rely on the development restrictions
that zoning imposes, the systems may appeal to defenders of private
property rights because TDRs use private market forces to compensate
owners of zoned property.
Conservationists like the system because it offers a
carrot-and-stick incentive for developers to create pockets of higher
density development, while preserving open space.
In 1998, a task force of landowners and county planners
contracted Boulder, Colo.-based Clarion Associates to report on the
feasibility of creating a successful TDR system in Blaine County.
Clarion pointed out some significant hurdles a TDR system
would need to clear. Would there be sufficient market demand for TDRs?
Where would the "sending" and "receiving" areas be
located? What role would cities play? Would the system be mandatory or
voluntary?
"There’s no sense in going too far with this
concept if it’s not an idea that’s going to work here," Bergen
said.
Bettin’ on the come
While these events unfold, agriculture continues to
diminish, taking with it its benefits to the community.
Farmers and ranchers are aging rapidly. From 1992 to 1997,
the number of people engaged in agriculture in Blaine County who were
under age 70 decreased, while the number above age 70 increased.
Who will replace them when they can no longer work the
land?
Haught’s view is dim. He believes the sons and daughters
who traditionally perpetuated farms and ranches have moved on to more
lucrative occupations in cities. When they eventually inherit the land,
they’ll want to subdivide it, sell a portion for a profit, and retain a
small parcel as vacation property.
Already, agricultural production is decreasing in Blaine
County. From 1992 to 1997, the market value of agricultural products sold—almost
entirely hay and barley—decreased from $26.6 million to $23.6 million.
At the same time, the value per acre of agricultural land and buildings
nearly doubled from $710 to $1,361, according to the National Agricultural
Statistics Service.
Bonafide farming or ranching often "doesn’t make a
lot of sense," Haught said. Farmers or ranchers may know, for
example, that weather and market conditions will almost surely lead to a
financial loss of perhaps $40 an acre if they plant a crop, but they’ll
do it anyway. It’s called "bettin’ on the come," Haught said—with
luck, something positive will happen to make things turn out better. And,
though a farmer may be slowly sinking financially, he or she may remain
optimistic because of the constant flow of cash involved in doing
agricultural business. Most carry a fat roll in their pockets, he said.
That’s what happens in places like Lincoln County, where
he lives and worked for 23 years as a farmer before giving it up to become
a tax assessor in 1987.
It’s also what happens even in Blaine County in the
Carey Valley and farther south, he said. But north of there, in the area
just south of Bellevue, for example, where prices per acre can run over
$10,000, legitimate farmers and ranchers simply can’t afford to risk
"bettin’ on the come," in Haught’s view. "The buyers
will never get a return off their [money] by farming… It’s no longer
agricultural land anymore," it’s "investment property."
Though farmers and ranchers might not agree they should
pay higher taxes, they probably do agree with Haught’s assessment of the
difficulties of farming and ranching in Blaine County.
Bill Sherbine, who is a third-generation Blaine County
farmer, probably rents more land south of Bellevue than anyone. In 1998,
he itemized his expenses and revenue for an Idaho Mountain Express
reporter. His total cost per acre for plowing, rent, seed, irrigation,
etc. was $286. That amount didn’t include hail insurance, depreciation
of equipment and the cost of housing farm hands.
A good crop of barley brought in $300 per acre.
"What’s going to happen to the land if we can’t
afford to farm it anymore?" he said.
So, if farmers can no longer make a living anyway, what’s
the likelihood that deed restrictions set in place by a TDR system would
save agriculture in Blaine County?
Tom Bergen doesn’t have a firm answer to that question,
and, likely, it’s one of the questions county planners would have to
address before implementing a TDR system. However, Bergen said, by selling
development rights, farmers and ranchers would get a "one-time cash
infusion," while at the same time, the "loss of the development
option should encourage agricultural use."
He said he didn’t want to speculate on how much that
boost might be.
Their one asset
A couple of weeks after the Dec. 5 tax appeal hearing,
Mann was as angry as ever about the new tax assessment. But her lawyer,
Terry Hogue, had instructed her not to discuss the situation. The State
Board of Tax Appeals is scheduled to make a decision on the case sometime
before May 1. The board will either reduce appellants’ taxes or uphold
Haught’s higher assessment. Hogue and Mann are holding their cards close
in case a further legal battle ensues.
Meanwhile, the County Commissioners expressed in a
November priorities-setting meeting a desire to move their TDR work higher
up its agenda of projects.
Last spring, the board considered a TDR ordinance drafted
by the planning and zoning department, but remanded the ordinance back to
the P&Z for further work.
South-county rancher Katie Breckenridge, whose comments
have played a major role in the TDR work, is currently gathering
information, largely through interviews with other landowners, to identify
their needs. She’s also creating an 8-foot by 14-foot map showing
environmentally sensitive areas such as wetlands, and to help identify
potential sending and receiving areas.
"There’s nobody down here that wants to
subdivide," she said during a telephone interview. "But we have
one asset, and that’s our land, and we have to sell it."
Bergin said planners are considering reactivating the task
force that initiated the 1998 TDR feasibility study.
Otherwise, he admits that "nothing much public has
happened with TDRs since last fall." But he’s not necessarily
against a slow, careful approach that might help ensure that the county
creates a successful program that developers will actually use.
"Some [TDR systems] get added to the books," he
said, "but they never see the light of day."
