(Continued tram Page A 1)
need for tax reform, and that is why
we have elected officials with us
here tonight,” Shertzer said.
The elected officials were intro
duced. In the group were Rep. Tom
Armstrong; Rep. John Barley; Sen.
Noah Wenger; Terry Kauffman,
Lane. Co. commissioner, Paul Thi
bault, Lane. Co. treasurer, Robert
Kindig, president, and Ed Davis,
member. Penn Manor school
board, and Les Eckman, Manor
Twp. supervisor.
‘This is not a whining or com
plaining session,” Shertzer said.
“But it is a time for farmers to share
our insights and hearts on this issue
of high assessments.”
Dave and Lou Ann Hostetter
were first to report. They used their
own farm tax situation as an exam
ple of the impact of real estate taxes
on their farming operation.
“We believe we are being
unfairly burdened in financing loc
al governments,” Dave said. “Our
products are sold on contract or
market price, and we have no way
of extending these costs to others.
Since we purchased the farm in
1986, real estate taxes have been
rising at an alarming rate. Under
the present taxing system, the abili
ty to pay is not considered. That’s
why we are concerned about our
present situation and more so, our
future in farming.”
Lou Ann showed their farm tax
es with a bar graph. In 1988 their
farm paid $4,000 in taxes. By 1991
their payment increased to over
$5,000 and now, two years later the
1995 tax bill is over $7,000. Of
course, reassessment does not
Idck-in until next year.
At the same time, the average
residental property in the district
increased $758. For the nine .year
period, the farm paid $46,870 in
taxes while the average residente
paid $10,171.
To put the earning power of the
farm in perspective to the residen
tial wage, Lou Ann said the aver
age household in the Manor district
would need to be earning $178,000
a year to be spending the same per
centage of income for real estate
taxes.
“We would like to continue to
farm, but with the present tax sys
tem it does not look real encourag
ing,” Dave said.
Noll said his father
purchased the farm in
1965. At the time, the
farm was in consider
able disrepair. Sodded
waterways and terraces
were installed to con
serve the soil. Noll said
he was proud of his
father for doing the right
things to build up the
farm.
Today, however,
everything is being done
to increase the income
on the farm. Noll called
the farm “maxed out.”
The beef and broiler
operations on the 125
acre acre farm with 116
acres tillable has been
expanded to the limit
Double cropping of
beans and com after hay
has been done for about
the last 10 years. Addi
tional ground is rented,
and some custom work
is done to increase
income. Even with the
increased farm activity,
the farm economy has
not kept up with costs,
and Noll’s wife works
part time off the farm.
Manor Farmers
Noll said he also is “maxed out,”
working the equivalent of two full
time jobs on the farm but with an
income that amounts to the average
teacher’s salary in the Penn Manor
School District “I’m paying more
than my fair share of the tax burden
because of the income the farm can
generate,” Noll said.
Noll said excessive taxes on his
farm is nothing new because
assessment on his broiler houses is
based on the square feet size rather
than the ability to produce income.
In 199 S his real estate taxes are
expected to take over 16 percent of
his farm and off-farm incrane. And
with the reassessment he projects
next year 31.7 percent of his
income (if his income stays the
same as this year) will go for real
estate taxes. Taxes divided over the
total tillable acreage on the farm is
$159 per acre and you can rent
ground for less than this cost Even
with “Clean and Green,” the prog
ram that helps to base farm assess
ments on the ability to produce,
Noll said he would pay $1,500
more next year than at present
“One of my major concerns is
that if property taxes continue to
increase at the rate they have been
in the last 10 years, 1 will soon be
paying 35 to 40 percent of my total
income,” Noll said. “That will
mean I will be retiring from this
farm before I expected or hoped to
do.
“Obviously, I am paying four or
five times what the average home
owner is paying with the same
income. Industry is paying less
than one percent of its net inQome
on property taxes. If taxes on farms
increase in the next 10 years like
the last 10 years, there is no ques
tion I'will be doing something
other than farming.”
“Is this really what Lancaster
County wants for our farming com
munity? I hear often that we must
save the Lancaster County farm.
What does this mean? At whose
expense are these farms to be
saved?”
Wilmer Shertzer said his assess
ment increased 1,015 percent, and
many farms have experienced
1,000 percent increases. He said
we don’t need this extra expense in
the dairy industry in which lower
milk prices and increased produc
tion costs have reduced bottom line
Meet To Assess Reassesment
incomes. In 1982, dairy farms had
8.4 percent profits after taxes. In
1993 this profit dipped to 1.5 per
cent, and under the new reasses
ment tax base, profits will go
below one percent.
“With this very low profitabili
ty, it’s the kind of business you sell
to someone else and let them lose
the money,” Wilmer said. “I think
we need a totally new structure for
taxes. But before that can happen,
we need relief from the assess
ments the county has imposed.
Every farmer needs to take some
kind of stand and do our job to get
this thing changed.”
Dave Charles said he was disap
pointed that the whole reassess
ment program was done in secrecy.
Even under “Clean and Green,” the
buildings are the same as under the
regular assessment. And because
the figures have not been released
to the county, these figures on farm
buildings are hard to obtain. “Even
at the prescribed hearings, very
few of us got to see the paper work
involved,” Charles said. “I think if
there had been more openness
before the final decisions, there
would have been greater input into
the procedures and a possible bet
ter tax situation now.
“I learned that the most valuable
building on our farm is a spring
house they coded as a granny house
or apartment where grandma
would live. That building was not
constructed as a dwelling place and
could not be made livable. Also, it
is 40 feet long; they have it at 500
feet.
“1 encourage everyone to go
over his figures,” Charles said.
“Check the date of construction,
what the building is being used for,
the depreciation schedule, size of
the building and the final assess
ment Property taxes are prone to
error. The majority of local taxes
should be based on income and not
on someone’s opinion.”
Guy Eshleman said that on his
200 acre crop farm it’s a struggle to
make ends meet and with the new
taxation schedule, he will owe
$32,000 on his 200 acres. That’s
240 per acre. “Why would I
encourage my kids to go into farm
ing when you can rent gound for
less than that?” Eshelman asked.
“We can’t keep on digging into
savings to pay taxes to keep on
farming for the pleasure of it. We
are all in this together.”
Phil Shertzer said he was con
cerned that many farmers are going
to get a wake up call next year that
they are not anticipating. “We
know it will be high ” Shertzer
said. “But when the bill comes and
your taxes are doubled, I don’t
know about you. but I don’t know
where that extra tax money is com
ing from. We are paying for farms
with what is being generated on
these farms. We’re not coming to
the farm with a pocket full of
money.”
Terry Kauffman, county com
missioner, confirmed the report
that the county had asked AVS to
do a full review of the Manor dis
trict In addition, the county’s regu
lar assessors are doing spot checks
throughout the county.
‘The board of commissioners is
determined to make the assessment
fair and equitable. Where there are
discreprancies, we are going to
look at that We want to be able to
tell you with clear conscience that
we have done it the best way we
know how.
“But even if every one of your
farms’ assessments were reduced
by 20 percent right now, with what
has happened in Penn Manor in the
past in two years, the total tax bur
den would be exactly the same.
What I’m telling you is that tax
assessment is a horrible way to do
business; tax reassessment is an
inexact science.
Noah Wenger said he believed
the farmers' concerns were legiti
mate and said that was why “Clean
and Green” was enacted—to give
some relief to the ag community.
But it does not solve everyone’s
problem. He said there were state
bills in progress that would address
the tax reforms to shift taxes from
real estate to personal income.
“But, tax reform does not reduce
taxes; it simply shifts taxes” Wen
ger said. “In most cases the shift
would be beneficial to many far
mers. But if you arc retired and
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don’t own teal estate and your
income is from investments, then
you will have an increase in taxes.
Think about it carefully. Reform
will be helpful to soihe people, but
every time you reduce tax for one
person, you increase it for someone
else.
Tom Armstrong said he
believed that legislators were con
vinced that we need to transfer
from real estate based taxes to
earned income. But some areas of
the state already have an earned
income tax, so for them tax reform
would be somedng different At
one time, only property owners
could vote. Now everyone can
vote, but many of these people own
no property. “Since we have more
people who have an earned income
who don’t own property, they need
to pay their share of taxes also,”
Armstrong said.
John Barley said that before we
can address tax reform, we need to
address the cost of government
And while agreeing with the need
for tax reform. Barley said that not
all the savings in farm taxes would
be profit for the fanner if the base
was shifted from real estate to
income.
Barley gave the example that if
the shiftreduceda farm’s tax liabil
ity from $6,000 to $3,000, the
saved money would then become
income and subject to the increased
taxes on this income. If this extra
$3,000 shifted the farm total
income into a higher percentage
bracket, then the farm might run
the risk of paying more taxes than
with the real estate based tax.
3ut for the farmers seated on the
straw bales on Bob Noll’s barn
floor Monday night, the issue of
how the taxes were assessed was
not the real heart of the underlying
feelings in the meeting.
“In many cases, for farmers, you
are not talking about greater or
fewer taxes.” Phil Shertzer seemed
to express the consensus of the
group: “You arc talking about our
survival.”
“When we were looking for a
milk market, we chose Atlantic
Dairy Cooperative because of its
financial stability. ADC is a
progressive cooperative that
concentrates on what it does best
- marketing milk ”
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Taneytown, MD