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HomeMy WebLinkAboutCOM 0923.016 2014-2016 pig co MM. 123 Murashige, Laura From: Peggy Farias <mefarias@whshipman.com> Sent: Tuesday, October 18, 2016 10:21 AM To: Council Testimony Subject: written testimony for Finance Committee meeting 10/19/16 Attachments: Written Testimony for County FC Meeting 10-19-2016.pdf;ATT00001.htm Aloha, Attached please find written testimony on Bills 218, 219, and associated Communications for the Finance Committee meeting on 10/19/16. Please contact me at 345-9605 if you have any questions. Mahalo, ® e► >. Peggy Farias a.. c= . -s. .... rya' ,,.-. ta := 11 No. Ref. To: T Ref. Dote 1 Written Testimony for County Finance Committee Meeting, 10/19/2016 Commenting on Bills 218 and 219 and associated Communications Aloha,my name is Peggy Farias and I am the CFO of W.H. Shipman, Ltd. in Keaau. I have been able to participate in or testify at several recent meetings on the Dedicated and Non- dedicated Agricultural Use Assessment programs, and would like to thank the Finance Committee for their hard work and efforts to understand the complexities of revising these programs. My testimony today can be summarized in one simple request: please DO NOT pass any bill that increases assessments (and therefore taxes) in the non-dedicated program without also changing the dedicated program to be more accessible to a greater number of farmers. There seems to be a perception that farmers enrolled in the non-dedicated program are somehow less legitimate than farmers who are able to dedicate their land, and therefore that farmers in the non-dedicated program are less deserving of the county's support.This is simply not true.There are many legitimate commercial farmers in the non-dedicated program not by choice,but because their model of farming doesn't fit into the dedicated program. For instance,most independent papaya farmers grow their papayas on land that they lease for periods of 4-5 years, because that is the viable length of time for a papaya field.After five years,the trees become too tall to harvest, and the health and productivity of the field begins to fail. Such a farmer is no less legitimate than a farmer with longer term crops,but cannot qualify for dedication under Section 19-60 as currently written and therefore must participate in the non-dedicated program. Farming is a business with very low margins.To get an idea of how increased assessments might affect small and independent farmers,let's look at some calculations applying current tax rates to assessment values provided by the Department of Finance.An independent papaya farmer with a 4-year lease on 15 acres would currently pay $416.25/year under the non-dedicated agricultural assessment. In comparison, a macadamia nut farmer with a 25-year lease on the same acreage would pay only $208.13/year under the dedicated assessment. Some of the proposed amendments to Bill 218 and 219 raise the non-dedicated assessment to a minimum of three times the dedicated assessment. Under that proposal,the mac nut farmer would still pay$208.13,but the papaya farmer would pay$624.38 in taxes every year. To an independent papaya farmer,that increase of$200 or$400 may mean less money available to buy fertilizer and supplies, resulting in decreased production and reduced income in addition to the higher tax expense.The result of increases to non-dedicated assessments without changes to the dedicated program will be that some of these farmers will be driven out of business, and some ag lands may consequently be driven into other uses. We support the original version of Bill 219 and some of the most constructive proposed amendments to Bill 219, such as the inclusion of fallow and waste land and ag roads in paragraph (a) and the provisions for signatures of multiple or majority owners in paragraph (c)(3).We would further encourage the committee to crack down on abusers by codifying eligibility requirements in paragraph (e) and to enhance enforcement efforts by adding language requiring access for inspections. But we cannot and do not support any changes to Bill 219 which increase the assessment rate in the non-dedicated program. Thank you again to the entire Committee, and especially to Mr. Ilagan and Ms.Wille, for the and improve these programs. time and effort that you have put into trying to understand p p g As the time for passing a bill grows short, I hope that you will all put a priority on the farmers that the assessment programs are designed to help, rather than on the County's need to increase revenues. Mahalo.