Lansing Tries Again On Farmland Tax Reform

The Michigan House of Representatives has approved legislation that would allow qualified local governments to make dramatic cuts in property taxes on agricultural land. It is the Legislature’s latest attempt to tax farmland for its agricultural value rather than its development value in a longstanding effort to preserve active farmland from commercial and residential development. The bill, which now goes to the state Senate for debate, would grant dramatic tax reductions of between 60 and 75 percent to working farms. To qualify, local governments would have to have a comprehensive land use plan in place, and landowners would have to agree to keep farming for at least 20 more years. In exchange, the state’s currently very hard-pressed general fund would lose an estimated $27 million annually in lower property tax revenues, after a five-year ramp-up period that would start in 2006.