- The Washington Times - Monday, January 29, 2007

TRAVERSE CITY, Mich.

Farmland preservation advocates are unhappy with Gov. Jennifer M. Granholm’s veto of tax breaks for farmers who promise to keep their property in agriculture instead of selling out to developers.

The bill won final approval from the Michigan Senate last month, but it was among several tax incentive measures the Democratic governor vetoed Jan. 18, saying they were too expensive. Mrs. Granholm recently said the state needed an extra $1 billion to balance its budget for the next two years.

“It’s all about the money,” spokeswoman Liz Boyd said. “We’re supportive of the concept.”

Supporters said the farmland bill was worth the cost. It had been pared down from the original version to lower the price tag, which would have been about $1 million annually for five years.

“It should be a high priority in Michigan to help our farmers be competitive and preserve agricultural land,” said Rep. Howard Walker, Traverse City Republican and the primary sponsor. He said he would introduce the bill again during the next legislative term.

Preventing green space from being sold for development was among the principles endorsed by Mrs. Granholm’s Michigan Land Use Leadership Council in 2003. Under Mr. Walker’s bill, landowners approved to participate could have received income or business tax credits to offset property taxes exceeding $7 per acre.

Farmland often is taxed at $20 or more per acre. Mr. Walker said Michigan is the only state that bases its farmland rate on potential development value instead of agricultural value.

In exchange for the tax break, landowners would have been required to keep farming their land for at least two decades. They could have opted out after 10 or 15 years but would have had to repay the benefits they had received plus interest, Mr. Walker said.

About 375,000 acres were expected to be enrolled in the program over the initial five years. Supporters hoped it would be expanded afterward.

Mr. Granholm’s administration voiced concern that owners would use the program as a tax shelter to boost their land’s value before paving it over. To discourage that, the governor sought tougher penalties for early withdrawal than the bill’s supporters would accept, Miss Boyd said.

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