Split Roll Tax Initiative Will Have Substantial Impact on Agriculture

Brian German Agri-Business, Industry

Agricultural groups have serious concerns as it pertains to the split roll tax initiative that will be appearing on the November ballot. If the measure is passed it will make serious changes to Proposition 13 in reassessing commercial and industrial properties at fair market value. The California Farm Bureau Federation (CFBF) has joined the Californians to Save Prop 13 + Stop Higher Property Taxes coalition in opposing the initiative, as it could have devastating effects on the agricultural sector.

Split Roll Tax Initiative

“Since the initiative only exempts agricultural land, it leaves improvements and associated fixtures to be taxed at fair market value,” said Robert Spiegel, Policy Advocate for CFBF. “This could very well be a dairy barn for example, a food processing facility, wineries, irrigation systems are necessarily improvements as well. So, anything that has been constructed upon the property that is nonresidential that arguably the proponents believe is an industrial component or a commercial component for agriculture would be taxed.”

The Schools and Communities First group is leading the campaign in support of the ballot initiative, naming it the Schools and Local Communities Funding Act. While proponents of the ballot measure, Initiative 19-0008, claim that agriculture would be exempt, Spiegel explained that only the land itself would not be affected by the reassessment.  Permanent crops may be subject to the split roll tax initiative if the measure is passed.

“Split roll could have a very direct impact on those who might happen to be tree and nut orchard farmers and/or vineyards,” said Spiegel. “Each one of those trees arguably then, or that vineyard, would be open to a fair market value assessment now under the initiative.”

Depending on how the split roll tax initiative is interpreted and how commercial agricultural production is defined, the impact on the industry could be vast and severe.  Not only would farmers and ranchers be impacted, but there are also concerns related to how the initiative will affect the rest of the food supply chain.  The entire processing and distribution network will all be “impacted by this initiative at fair market evaluation associated with commercial and industrial property as this initiative is designed to do,” Spiegel explained.

About the Author

Brian German

Facebook Twitter

Ag News Director, AgNet West