June 28, 2006
Bishop Promotes Tax Relief For Farmers
The issue prompted the formation of the Peconic Land Trust, founder John V. Halsey recalled this week. Back in the 70s, he saw a "For Sale" sign on a farm in his Southampton hometown. The owner of the land had died; his survivors couldn't afford the massive estate tax and had to sell out. To this day, Halsey says the huge tax hit continues to pose a threat to the continuation of the farming industry on Long Island. In fact, just recently, the Barsczeski Farm in Sagaponack was lost because enormous estate taxes forced the family to sell. The property was valued at nearly $25 million; estate tax measures half the value. "There was no way the family had the money to hold on to the land," Halsey reported.
Congressman Tim Bishop has a plan designed to make sure no farming family has to sell out to pay estate taxes. He's sponsoring an amendment to the tax code that would defer estate tax on working farms and agricultural land eligible for conservation easements. The tax could be deferred in perpetuity if the land is preserved
Halsey supports the bill, but not all farming advocates do. Joe Gergela of the Long Island Farm Bureau last week pointed out that nationally farm bureaus have weighed in in support of a total repeal of estate tax. "The whole premise of an estate tax is wrong," he said, "Death should not be a taxable event." Legislator Ed Romaine agrees. Even though he, too, supports the total repeal, he's sponsored a memorializing resolution in support of Bishop's bill. The legislature was expected to vote on it during its session in Riverhead yesterday.
Romaine sees Bishop's measure as a compromise and said, "It's like chicken soup, it can't hurt."
While the estate tax measure didn't garner full out support by farming advocates, a second Bishop measure has. The lawmaker is calling for another revision to the tax code relating to the sale of agricultural property. On occasion, a farmer will sell to a municipality for preservation. Problems arise, however, when the municipality seeks to pay for the land in installments. The money is paid in installments, but the farmer is charged with a capital gains tax at the time of the sale. Bishop's proposal spreads the tax hit out concurrently with the installment payments. According to the congressman, a quirk in the tax code penalized the seller when he sold development rights on an installment basis, and created a "cash flow disincentive."
Romaine, a Republican, said this week that the effort to protect farmland crosses partisan political borders. "It's something we all agree on. We don't want to see any more farmland disappear." Bishop, a Democrat, said he was delighted and honored to have Romaine sponsor the bill in support of his proposal.
In other farming news, as predicted in last week's Independent, Democrats on the county legislature have submitted a bill seeking to protect over 400 acres of North Fork farmland. The filing of the bills comes on the heels of Majority Caucus leader Jon Cooper's declaration that too much money is spent on East End land preservation. He made the remarks in reaction to Romaine's effort to begin the purchase process for the same land included in the new bill.
Learning of the new incarnation, Romaine's office sent out an alarm, alerting members of the GOP caucus to a case of "bill napping."