To the Editor:
When a farmer dies and the estate is transferred to his children, it is assessed at its fair market value (which is probably house lots) rather than as farmland. Thus, the average farm in Rhode Island (about 50 acres) is easily assessed at millions of dollars.
Since the exemption for the estate tax is only $850,000, farmers have no alternative other than to sell at least part of the farm in order to pay the state estate tax. It has been proven time and time again that it usually costs towns money to support houses (over $1.40 in services for each dollar collected) versus making money on farms (less than 40 cents in service for each dollar collected) even with the farms having reduced taxes if they are under the Farm Forest and Open Space program. So while the state gets a one-time infusion of cash, cities and towns have to support the houses created by the sale of the farm in perpetuity.
House bill 7969 by Donna Walsh and Senate bill 2172 by Walter Felag would assess farmland as farmland for estate tax purposes. Under these bills, the average farm would pay no state estate tax, with larger farms still having to pay a tax. If we continue to appraise farms as house lots, they will all become house lots.
Executive Director, RI Farm Bureau