HILO, Hawai‘i — Big Island farmers are urging Hawai‘i County to postpone or cancel a set of new agricultural tax rules they worry will spell the end for many small farms.
It was standing room only Thursday night, July 18, at a public hearing hosted by the Finance Department about a series of planned amendments to the county’s process for dedicating land for agricultural use.
The amendments follow a series of county bills — which were largely discussed and passed last year, although one relevant measure passed in 2021 — that together establish a new series of land dedication standards in an effort to close certain tax loopholes.
During discussions about those bills, council members said the county’s nondedicated agricultural use assessment, which allows landowners to have their land assessed at lower values for tax purposes, was often exploited by “gentlemen farmers,” wealthy landowners claiming the tax benefit despite doing little or no actual agricultural work.
That nondedicated use program will end in September, as outlined in one of last year’s bills. In its place will be three different agricultural dedication standards: 10-year long-term commercial, three-year short-term commercial, and five-year Community Food Sustainability Use Assessment.
Real Property Tax Administrator Lisa Miura gave a lengthy presentation at the meeting outlining each of those standards. Farms in the short-term dedicated tier would be subject to the same value assessments as those in the soon-to-end nondedicated use program, while farms in the long-term tier would be assessed at half that value.
Farms in the Community Food Sustainability program would be assessed at 30 percent of market value.
Each of the dedication tiers would be subject to certain eligibility requirements and standards — minimum size requirements, maximum allowable fallow periods, specific acceptable agricultural uses, and so on — although Miura said many of those requirements could be waived if a farmer explains in a farm plan why they can’t meet a given standard.
All three assessment tiers share one similar requirement, however: documentation showing a certain level of economic productivity from every farm.
Long- and short-term dedications could require proof of at least $2,000 annual gross income per farm operation in order to be eligible, although Miura said that requirement could be substituted with “adherence to generally accepted standards or recognized practices within that agricultural industry.”
Farms in the the Community Food Sustainability program, meanwhile, would require documentation of at least $1,000 in annual sales (or donations to nonprofits) in order to be eligible for renewals.
While dozens of people testified against the new rules for a myriad of reasons, many of them took issue with the economic productivity requirement.
“We’re not profiteers,” said farmer Lisa Dowd. “We do it for love, not money.”
Dowd said that although the county has acknowledged the importance of regenerative agriculture, necessitating that small farmers reach arbitrary profit targets will lead to people compromising on sustainability in order to reach targets.
Several farmers said they simply grow vegetables or raise livestock on their properties to feed themselves and give to friends, family and neighbors — “you don’t get receipts when you give food away,” said Russell Hiser.
Others raised more specific problems with the new rules.
Sterling Chow said that not applying for one of the three dedication tiers is not an option, given that his property tax will more than double if he does not. But applying for one of the three also will require him to to obtain new insurance, which he said was needlessly punitive for noncommercial farmers.
“Our ranch has been in my wife’s family for more than 100 years,” said Andrew Stout. “My wife is the first generation to have to prove (the land) is being ranched.”
Still other attendees lamented that the perfectly acceptable nondedicated use program is being retired. Eric Weinert said the whole enterprise seemed to be a great deal of bureaucracy in order to catch a scant few violators.
Brittany Anderson, who is running for the Hawai‘i County Council seat for Hamakua, said her farm made no money for two years as she and her husband got it up running, something which she said was only affordable through the nondedicated use program.
Anderson and several others urged the county to defer any action on the new rules for at least one year in order to consult with farmers about how to proceed.
A near-universal refrain among testifiers was that there was insufficient public outreach about the new rules. Many testifiers said they only became aware of the rule changes when they received a letter telling them about Thursday’s hearing.
Because the hearing was only intended to gather public testimony, the county made no action on the rules. The county Finance Department will review the testimony and make a decision about the rules by mid-August.
