—Lancaster Farming, Saturday, November 4,1972 26 Assessing Farmland According to Use (Editor’s Note: The following report was prepared by Donald J. Epp, an associate professor of agricultural economics at Penn State. In many instances, farm real estate taxes have climbed to a point where farmers feel compelled to sell out because they can’t make a profit from farm operations. Taxing far mland according to its use rather than its market value is one method that’s been proposed to remedy this situation. Epp takes a look at the impact of use-value assessment on farms throughout the Commonwealth. In Lancaster County, Epp found that use-value assessment would probably in crease most farmers’ tax bills.) The prominence given to discussions of real estate taxes has brought to light a long standing concern among many groups with the way we tax agricultural land, particularly that which is adjacent to growing urban areas. As cities begin to grow out into the surrounding rural areas, some of the best agricultural land is removed from agricultural production. As land-use shifts from agricultural to urban, surrounding properties also increase in value. This increase in value, resulting from potential use of land for urban develop ment, results in an increased property assessment and an increased bill. Some farmers have com plained that these increased taxes based on potential use cannot be paid with the income received from farming the land. This often “forces” an individual to sell his property in order to get out from under the burden of paying excessive taxes. Many people have voiced concern with this premature sale agricultural land which often results in “idle” land adjacent to our growing metropolitan cen ters. The consequent dislocation of people interested in active fanning is also a source of concern. A second source of concern resulting from the shift in use of farmland near cities relates to a sense of aesthetics, Many people believe that open space has a place in an attractive landscape near our cities, and they feel that agriculture could very logically fit into this open space. A third source of concern with the shift in land-use from farm to urban is that much of Penn sylvania’s best farmland is Your life is complicated enough. We offer Simplicity Mow, vacuum and mulch all m one operation with the Simplicity vacuum collector that goes anywhere the tractor can Cleans full width of the mower Available in 8-10-15 HP. Models CLEARANCE ON 1972 MODELS L. H. Brubaker, Inc. 350 Strasburg Pike Lancaster 397-5179 located very near growing metropolitan areas. These far mlands have not only supported a thriving agricultural industry, but have also contributed to a very substantial service and processing industry related to agriculture. As farms disappear,'the sup port for these agriculturally related industries is also diminished. Many of them will find it difficult or impossible to continue their operations and additional unemployment problems could result. There are subtantial numbers of people who feel that we should take step to preserve the agricultural industry on the most productive land in Pennsylvania to maintain a strong economic base for such communities. These groups argue that the diversity provided by agriculture and its related service industries in a growing metroplitan manufacturing center provides opportunities for people with all types of skills to find profitable employment. Many solutions have been proposed for solving these problems. This article focuses primarily on proposals for altering the methods of taxing farm real estate. Various suggestions have been made to reduce the farmer’s tax bill to allow farmland to be kept in active production, thus achieving the benefits of a diversified economic base and an aesthetic landscape near our metropolitan centers. The most prominent of these PUBLIC SALE OF DAIRY HERD, FARM MACHINERY SATURDAY, NOVEMBER 18,1972 The undersigned will offer at Public Sale on the prem ises, located along Goshen Mill Road, 2 Miles West of Route 272, 2 Miles Northwest of Wakefield, 2 Miles South of Chestnut Level, Drumore Township, Lancaster Co., Pa. Watch for Sale Signs along Route 272. OUSE COWS^^P^jl 50 HEAD OF HOLSTEIN 10 FRESH in Last 8 Waeks; 20 SPRINGERS, soma duo by Sala Day; Balanca in all stages of production Farmers don’t miss this sale if you are in need of Cows. 30-Day Test, Pregnancy Checked. Cows sold at 1:00 P.M. FARM MACHINERY 1963 CHEVROLET Va-TON TRUCK; 3 TRACTORS 630 John Daara, good condition; 1020 John Daara, with 37 Loader, good condition; John Daera B, with Cultivator; 7-Ft. John Daera Side Mower; New idea Manure Spreader, used one year, PTO; New Idea Forge Wagon, front and back unload, used 1 year; Allis Chalmers Crimper, new; John Deere 14T Baler; John Deere No. 12 Harvester; John Deere No. 16-A Flail Chopper; John Deere 1-Row Corn Picker; John Deere 15-Dlsc Drill, on rubber; John Deere 28-Disc; John Deere 2-Row Corn Planter, 3-Pt.; John Deere 32-Ft. Elevator, like new. John Doer* 3-Bottom Plow, 16", 3-Pt.; Oliver 2-Bottom Plow, 16", 3-Pt.; Scraper, 3-Pt.; 2 Grain Wagons; f.Ft. Cultipacker; Massey Ferguson Rake, on rubber; 3-Section Harrow; Fertilizer Spreader; Stauffer 2.Row Tobacco Planter; Rubber Tire Wagon, 16-Ft. Bed; Wagon Beds; 2 Minnich Tobacco Presses; 1,000 Tobacco Laths; Tobacco Shears;Milk Cans; Milk Tank Washer; 2 Universal Milk ers; 50-lb. Dumping Station; Hot Water Heater, glass lined, 52 gallons; Stainless Steel Tubs; Tractor Chains; Chains, and many articles not mentioned. Sale at 11:00 A.M. Terms by ARTHUR R. Frank and Paul Snyder, Auots. 890-2688 or 733-7062 ' Lunch by Robert Fulton Fire Company Not Responsible for Accidents proposals has been to base agricultural real estate taxes on the value of the land used for agricultural production as contrasted to the value which would result from residential or commercial use. Several bills have been presented to the current session of the Penn sylvania General Assembly to provide for the taxation of agricultural land and other open space land on basis of its current use rather than on its potential value. These bills have been actively considered by various committees of the legislature and some type of action may be likely in the near future. One of the first questions that must be answered is how to determine the agricultural value of farmland that has some alternative use affecting its market price. In other words, if a farm could be used for residential development and is, therefore, worth $2,000 an acre in such development, and currently has a market price of $2,000 an acre, how do you determine its agricultural value? There are three ways generally used to determine the value of a piece of real estate. The most reliable and frequently used method is to compare the sale prices of other pieces of land that are similar to the one in question and have been sold recently. This sale comparison method gives a good indication of what people in the market believe land is worth at the present time. HAY, CORN, STRAW Determining the value of real estate LONG, JR. A second technique that is frequently used for buildings and other improvements is to determine what their replacement cost would be, deducting depreciation based on the age of the buildings. The third generally used method of appraising real estate is to determine the income that can be generated from the use of that property and capitalize this income into a land value. These three methods all have problems, when we try to use them to determine the agricultural value of a piece of peoperty near our growing cities. The first method is difficult to use because no land is used strictlv for agricultural purposes. Every comparable sale includes the possibility that the land may be used for residential or com mercial development. A replacement cost technique is used for buildings and does not help us to determine the agricultural value of the land. The third method, income capitalization, holds promise because farmland is being used to generate income and this in come could be capitalized into a land value. A problem arises, however, because it’s difficult to sort out of the farmer’s management ability on the productivity of the land. For instance, a poor farmer with good land may have a low income, but this doesn’t mean that his land is not worth much. Likewise, a good farmer with poor soil may have a fairly high income because of his superior management, but that does not mean that the farmland is more valuable. Some method must be devised to determine the value of the farmland separate from the value of the farmer’s management ability. Use-value assessment A study currently underway at The Pennsylvania State University is investigating the (Continued On Page 27) MUNCY CHIEF HYBRID SEEDS LANCASTER SILOS Starline Labor Savers Feed Lot Construction SALES & SERVICE i. Samuel Sherer Mt. Joy K. 2 Phone 717-053-5207 or 717-653*5201
Significant historical Pennsylvania newspapers