posted 09/20/2010 - A couple living in Santa Barbara County California, Langdon Quetin and and Robin Ross-Quetin dream of retiring on the 25 acres they own on Lopez Island. The market rate value of the property is $357,560. The couple pay taxes on the property, half of which is forested, as though it was worth $11,580. Why? Because it's enrolled in the county's Farm/Ag Current Use program.
So how do you farm a 13-acre forest?
On March 17, 1998, a deputy assessor performed a physical inspection of the property which was then owned by the couple and the husband's mother, Claire M. Quetin. The deputy assessor filed a report stating: "...have been unable to discern any agricultural activity in compliance with the Current Use Open Space Agricultural Designation under which the property is being taxed. Both the 1978 and 1991 aerials indicated a large portion of this property is wooded..."
County Assessor Paul Dossett sent a letter dated March 31, 1998 to the owners saying "We are concerned your land may no longer be utilized for the purpose it was granted open space farm and agriculture classification." He asked for verification of farm income.
In May 1998, the couple's attorney contacted Dossett informing him "at the present time it will be difficult for Mr. Quetin and his family to actually "farm" the property." Langdon Quetin was interested in switching to Current Use Open Space status.
To qualify for Open Space status, a property must obtain at least 30 points under the public benefit rating system developed by the county. Points are given for providing protection for watersheds, habitat, historic structures or for offering exceptional views from land or sea.
The Quetins filled out a form, but apparently the status was not obtained. The half-forested property continued in the Farm/Ag category and the Santa Barbara County couple continued to pay property taxes as though they were actively farming the 25 acres.
On Feb. 2, 2001, Dossett sent another letter to the Quetins. "We are concerned your land may no longer be utilized for the purpose it was granted open space farm and agriculture classification." Once again he asked for verifcation of farm income.
In 2008, Assessor Charles Zalmanek sent out questionnaires to every property owner enrolled in the Farm/Ag Current Use program. Property owners who hadn't been farming faced up to seven years back taxes plus 12 percent interest plus a 20 percent penalty. However there was a way out. Switching to another Current Use program eliminates the need to pay the back taxes.
Sixteen property owners asked to be transferred to the Farm/Ag Conservation program. This program does not require the property owner to be actively farming. The program is for property that may be farmed in the future.
One property owner - the Quetins - asked to be transferred into the Current Use Timber and the Current Use Farm/Ag Conservation program. In a letter dated October 30, 2008 accompanying their application, the Quetin's wrote: "Our estimates of the amount of acreage under each designation were determined by figuring out proportions from the San Juan County parcel map. The 'legal description' is based on these approximate proportions. We have some wiggle room to shift a small amount of forested acreage toward Farm and Agricultural Conservation if appropriate to qualify."
Last Friday, September 17, 2010, the San Juan County Planning Commission held a public hearing on the Quetin's Current Use Timber Land application. They approved it. The final step is approval after a county Council public hearing which is still to be scheduled.
As for the headline - in 2010 the taxes on a $357,560 property on Lopez were $1,749. The taxes on $11,580 equalled $566. The difference of $1,183 has to be made up by other taxpayers.
16,184 acres (14.5%), of the land in the county, are in Current Use Open Space, Current Use Farm/Ag or Current Use Timber programs. Another 15,976 acres (14.3%) are in the Designated Forest Land program. The difference in taxes from the market rate vs the current use rate is paid by property tax owners not enrolled in the programs.
The public benefit of the timber and forest land programs is the excise tax provided back to the county from those programs. $760 was collected in 2007, $394 for 2008 and $136 for 2009.
Public Hearing Oct. 26, 2010 on 'farmed forest'
At 10:45 a.m. today, a California couple will likely receive approval of their Current Use Timber application from the county Council. They have been incorrectly receiving a tax break for farming the wooded acres. Now they will be receiving a 90 percent property tax break once it enters the Current Use Timber Program.
What does this mean to you? Picture taxes as a restaurant bill. You are out to dinner with four friends. One says I'll pay 10 percent of what my meal costs, another says I'll pay half of my tab, another says I'll pay 65 percent of mine, and the fourth kicks in 10 percent of hers. The restaurant tab still needs to be paid. Guess who gets stuck with the bill.
It's the same way with the Current Use programs. When the tax breaks are taken by some, others have to make up the difference.
The state created these worthy programs in the best interest of everyone. However, they need to be monitored. And they need to be administered judiciously. San Juan County does an inadequate job of monitoring compliance. Its public benefit rating system used to administer the program is overly generous and allows for double dipping.
Assessor Charles Zalmenek has requested additional staff in order to monitor the program. The council did not budget the staff last year and Council members Richard Fralick and Rich Peterson have said they do not intend to do so for 2011.
'Farmed forest' public hearing continued to Nov. 2, 2010
San Juan County Council continued the public hearing on an application to transfer 13 acres of forested property from Current Use Farm/Agriculture program to Timber land to 10:45 a.m. Nov. 2. Council member Rich Peterson called the property a "poster child for abuse" of the Current Use programs.
Langdon Quetin and and Robin Ross-Quetin of Santa Barbara County reaped the benefits of the Farm/Ag program for two decades even though they did not meet the requirements. They did not farm any of their property - and to make it even more egregious half of their 25-acre property was forested. Up to 1993, 20 percent of the property could be incidental use.
Assessor Paul Dossett sent letters over several years telling the couple there appeared to be no agricultural activity but did not follow up with any action.
In response to a question from Council member Lovel Pratt, Assessor Charles Zalmanek said, "Yes I think the Assessor's office should have taken additional steps. They should have taken additional steps towards removing it." He added, "In 1993 when the law changed from 50 percent incidental use to 20 percent incidental use, the Assessor should have removed the land which was in excess of 20 percent incidental use."
After more discussion among the Council members on the application, Pratt said, "It is the job of the county to remove them from the program, they are not saying they'll remove themselves from the program if they are not complying."
"I would like to hear from Randy (Prosecutor Gaylord) or Karen (Deputy Civil Prosecutor Vedder) what options we really have here," Peterson said. " Julie (Planner Julie Thompson) has a good point. We appear to have an application that is complete here."
"But we appear to have this record of, I guess the word cheating is a pretty broad word, powerful word - but that appears like what is going on here. Do we really have the option of not approving it given that the advantage has been taken historically of other taxpayers."
Council member Bob Myhr kept taking the conversation back to the early 1980s and who owned the property then and how properties entered the program in the 1970s and 1980s.
However, when the Quetins inherited the property in the 1990s they had to let the county Assessor know if they wanted to keep the property in the Farm/Agriculture Current Use program. Whenever property in Current Use programs changes hands, such a decision has to made by the new property owners.
Myhr also did not understand that the county already has a Farm/Agriculture Conservation Current Use program and is revising the criteria not creating a new program.
Tax break approved for aesthetics
Civil Deputy Prosecutor Karen Vedder spelled out the grounds for approval or denial of a Santa Barbara, California couple's Current Use timber application. While the council couldn't deny the application just because they previously received tax breaks for farming the woods, they did have other options.
Vedder told the council question the forest management plan in which the Quetins stated their goal was to maintain the property in "an aesthetically pleasing manner".
The council did not discuss the plan instead moving directly to a motion to adopt. They denied a request to reopen public testimony which was closed last week. The motion passed unanimously.
The couple will receive a property tax break and pay less taxes. Other taxpayers will make up the difference.