Farmland heirs get a break in state bond bill
The Recorder, August 20, 2018, by Richie Davis
The state’s $2.4 billion environmental bond that was approved last month is a grab bag of green goodies, from farmland preservation programs to farm energy initiatives, even if a Senate version calling for a ban on single-use plastic bags wasn’t included.
But beyond authorizations for agricultural viability, agricultural preservation and other efforts to help farmers, one of the policy initiatives that might be overlooked concerns how the estate tax is calculated on farmland that changes hands.
The American Farmland Trust calls the reduction of the estate tax on active farmland “a significant legislative victory for farm families and farmland protection in Massachusetts” — one that was putting 5,500 acres a year at high risk for development or being divided up.
The bond bill reduces the estate tax on farmland that remains in agriculture for at least 10 years by using the agricultural value of the land rather than its higher development value.
Reflecting a collaborative effort dating back more than two years, the legislation was filed by Rep. Stephen Kulik, D-Worthington.
“The legislature worked hard on this bill over the course of many months, and the result is a comprehensive piece of legislation that makes important investments in land conservation, environmental protection, parks and rural areas,” said Kulik. “I am particularly pleased with the inclusion of a provision that will allow farmland to be exempt from the estate tax so long as the farm remains in agricultural usage for the next 10 years. That provision, along with many others in the bill, will ensure that the beautiful farms and forests that dot the Massachusetts landscape exist and thrive for generations to come.”
Kulik said he was glad to see stipulations added in his original standalone bill limiting the estate-tax reduction to land that’s actively farmed, following criticism that it shouldn’t benefit people hoping to speculate in the open space or someone who simply wants to “preserve a bucolic view.”
“This will definitely help people who are successive generations in farm families, or people who have some arrangement with the farmer to have land transferred to them to keep it in agriculture,” he said.
The farmland trust’s New England director, Nathan L’Etoile of Northfield, says his nonprofit organization “hopes to parlay this important achievement into similar statutes across New England.
“This act alone will save tens of thousands of acres for future generations of farmers and for the commonwealth as it struggles to preserve its working landscapes. By reducing the burden of the estate tax, we make farming more viable, and by requiring a commitment to maintain the land in agricultural use for at least ten years, we protect farmland for the long term.”
Among the organizations advocating passage of the provision — along with Franklin Land Trust, Massachusetts Farm Bureau Federation, the Massachusetts Forest Alliance, The Trustees of Reservations, Land For Good and others, was the Massachusetts Food System Collaborative, whose director, Winton Pitcoff, said, “This was really good to see this policy piece included. It’s a primary piece that we’ve been watching.”
The bond bill also includes many other important wins for farmland protection, soil conservation and farm viability, the American Farmland Trust noted: $1 million for urban agriculture, $20 million for agricultural conservation easements and authorization for grants to incentivize climate change mitigation for farmers.
Yet, while the bond includes important monetary authorizations, Pitcoff cautioned that that money needs to be actually allocated for those programs.
“It’s always good to see the state represent their values in this kind of way and authorizing this kind of spending, the challenge is this is simply an authorization to allocate this kind of money over the next four years, but it’s up to the governor to do it,” Pitcoff said. “The track record shows the administration spends less than is authorized in bond bills on land preservation and really important programs like farm energy, and the governor hasn’t taken full advantage of the spending authority given to him in the bill. That’s what’s really going to matter.”
As of March, Pitcoff said, $37.5 million in Department of Agricultural Resources authorized under the 2014 bond bill were unspent, while only $25,960,372 of the $100,750,000 authorized for agricultural programs authorized under the 2008 bond bill were spent.