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Show Preferential Assessment of Farmlands Would Present Problems, Report Shows According to its opponents, adoption of the constitutional amendment permitting preferential prefer-ential assessment of farmland would (D increase taxes for the general taxpayer, (2) encourage en-courage land speculation and artificially push up land pile-es, pile-es, (3) continue many of the discriminatory taxing practices prac-tices of the past, (4) be a step leading to a classified proper-cy proper-cy tax, (5) cr-eate added administrative ad-ministrative difficulties, and i6) hinder orderly urban growth. These arguments were analyzed an-alyzed in a research study of farmland assessment in Utah and the U.S. prepared by Utah Foundation, the private tax research organization. Utah voters will be confronted this year with a proposal to amend the State Constitution in order or-der to permit preferential treatment of agricultural iand. It will appear on the 19C8 election ballot as proposition pro-position number four. The Foundation report also listed the following arguments Advanced by supporters of the proposition: (1) it would e-qualize e-qualize farm costs, (2) it would offset high property requirements re-quirements in modern farming operations, (3) it would help keep farmers on the land, (4) it would assure a food supply near major urban centers, (5) it would preserve open spaces near urban areas, and (6) It would help control land do-velopment do-velopment and head off urban sprawl. Foundation analysts point out that the present legal pol-icy pol-icy in Utah along with most other states is that all property proper-ty should be assessed uniformly uniform-ly according to its market val-u? val-u? which usually has been interpreted in-terpreted to be the highest and best use or "the most profitable pro-fitable likely legal use for which there Is a demand In the reasonably near future." As a practical matter, however, how-ever, the Foundation reports that most agricultural land assessments made In the past in Utah were based on agricul-tural agricul-tural use value rather than market value despite the constitutional, con-stitutional, statutory, and court requirements. This procedure pro-cedure of the past has resulted in inequalities not only between be-tween farm property and other classes of property, but also among farmers living in different dif-ferent sections of the state. For example, the report points out that the average ratio of assessment to selling price for land parcels of three acres or more varies from 7.0 in Weber County to 24.6 in Sanpete County. In Iron County Coun-ty the average assesment ratio ra-tio for such parcels was 13.48. Throughout the State, the average ratio of assess- ments to market value for parcels par-cels in excess of three acres was 11.3. This compares with an average assessment ratio of 17.8 for residential property and 19.3 for locally-assessed commercial property. pro-perty. The study notes that approximately ap-proximately twelve years ago, Maryland became the first state to "legally" permit preferential pre-ferential assessment of farmland. farm-land. This practice has since spread to about nine other states. On the other hand, efforts ef-forts to obtain such preferential preferen-tial legislation have failed in ten states during this period. If the proposal should be approved by the voters at the 1968 general elections, it would authorize the legislature legisla-ture to provide for the assessment assess-ment of farm property "according "ac-cording to its value for agricultural agri-cultural use without regard to the value it may have for other purposes." The exact na-ture na-ture and form of such preferential prefer-ential legislation, however, would be determined by the legislature itself. The Foundation study ob-'serves ob-'serves " that 1 preferential as-'sessment as-'sessment of farmland falls 'fnfo'four main categories: 1. Plain preferential assessment assess-ment which is outright abatement abate-ment of the difference between the tax that would apply if assessments are based on agricultural ag-ricultural use value rather than market value. 2. Tax deferral where the difference is merely deferred until the property is sold or the land use changes. Usually, there is a limit for which the deferred taxes are payable, such as three, five, or seven years. 3. Planning and zoning where the preferential assessment assess-ment and tax treatment apply only In areas which have been designated as agricultural or open space areas by an appropriate ap-propriate governmental agency. agen-cy. 4. Easement or covenant where the special tax treatment treat-ment applies only to properties proper-ties whose individual land owners contract with governmental govern-mental units limiting future development rights of their property to conform with area planning. |