Shellfish farmers seek tax break given to those on land
A bill to lend equality to sea and land in terms of local property tax breaks for farms is being hailed by seafood harvesters and producers while being balked at by some municipal officials.
The bill, passed unanimously last week by the state Senate, would add underwater shellfishing beds and certain waterfront shellfish shipping sites to the list of properties covered under the longstanding state statute known as Public Act 490. The statute allows farmland, forests, open spaces and maritime heritage land to be assessed based on what the property is used for rather than its fair market value, resulting in lower property taxes. It is a land preservation tool to allow owners to keep land that would otherwise be too expensive to hold on to.
Jim Markow, co-owner of Mystic Oysters with Jim Bloom, said the bill is necessary because the current taxation framework doesn't recognize that there's a very limited use for his shellfish beds.
"It's strictly land that we're able to farm the shellfish on, but we don't have rights to the water column. We just have rights to the bottom," he said.
Combine that with the fact that some beds may only get used every few years and others every five or 10 years, he said.
"I've had to go and grieve taxes before," he said of his repeated visits to local boards of assessment appeals. "Every year you get [the tax bill], it goes up and up and up. If you don't get on top of it, next thing you know you're paying a ton of money for a piece of ground you may not use for quite awhile."
In written testimony submitted to the state General Assembly's Environment Committee in support of the bill, Markow referenced one particularly steep hike on a Mumford Cove shellfish bed in Groton previously valued at $30 per acre.
Groton assessor Mary Gardner said the increase Markow referenced was the result of a 2016 revaluation during which her department standardized the town's five oyster beds to a value of $850 per acre. She said Markow's oyster bed was previously valued at $29 per acre while the other four properties were valued at $1,000 per acre.
Gardner said she does not anticipate much of an impact from the section of the law that expands the definition of farm land to include underwater farmlands used for aquaculture. That's because the current value assigned to the oyster beds treats them "almost as though they were already farmland," she said.
But she pointed to the part of the bill that expands the definition of "maritime heritage land" as one with financial implications she is less sure about. The language would extend the farming tax benefits on waterfront property, previously limited to commercial lobstermen, to licensed shellfish shippers and aquaculture operators -- as long as at least 50% of their adjusted gross income comes from commercial operations.
Gardner said she is not yet sure how that language could impact the town's grand list.
A list of certified shellfish shippers from the U.S. Food and Drug Administration shows one in Noank. Other nearby shoreline shellfish shippers operate out of sites including Stonington, Mystic and Niantic.
The bill would go into effect Oct. 1, 2021. It would not affect the local grand list until the following fiscal year, according to the state legislature's Office of Fiscal Analysis.
Bill sponsor and state Sen. Christine Cohen, D-Guilford, said in a press release that the Connecticut shellfish industry generates more than $30 million in sales annually and employs 300 jobs statewide.
State Sen. Heather Somers, R-Groton, was a co-sponsor of the bill.
"Consider this: Just a few years ago, we had no oysters in the Mystic River that you could actually use," she said in a statement. "Today, there are tens of millions of oysters in the Mystic River, and our water quality has never been cleaner. Hundreds and hundreds of aquaculture jobs have been created right here in Connecticut."
According to a Joint Favorable Report produced by the committee clerk for the Environment Committee, public hearing testimony included opposition from the Connecticut Council of Small Towns and the Connecticut Conference of Municipalities.
The report said Donna Hamzy, advocacy manager for CCM, argued the bill places the burden of subsidizing aquaculture on the communities that host the farming operations. She suggested a payment-in-lieu of taxes framework that would apply state aid to preserve the farming industry instead of penalizing the communities that support them.
The bill would also reframe the Connecticut Seafood Advisory Council under the name Connecticut Seafood Development Council and would add two members, bringing the total to 13.
Markow welcomed the proposed change.
"You think of Boston and all those other places, they have a pretty big lobby and put a big effort into their marketing," he said. " I think that Connecticut has something special and nobody really knows about it."
The bill now goes to the House for a vote.
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