Farmers and ranchers in La Plata County are feeling the pressure after the assessed value of agricultural lands this year experienced one of the largest jumps in the county’s history.
“It stunned me,” said Sandy Young, a rancher in the Animas Valley. “People are going to have to make difficult decisions.”
The value of properties classified for agricultural use are based on what the land can produce, derived from a 10-year statewide average for commodity prices and expenses, said County Assessor Craig Larson.
This year, that average dropped 2004 and 2005 market prices for wheat, hay and cattle – two years that were considered to be bad for agriculture, resulting in low market prices that kept assessed property values down.
In turn, the 10-year average added 2014 and 2015 market prices, regarded as profitable years as commodity prices continued to see sustained growth.
And to add to this perfect storm of a tax nightmare, lumped into the averages were market prices from 2011 to 2013, highly profitable peak years as ranchers from across the West, suffering from drought, flocked to Southwest Colorado to buy hay.
As a result, the assessed value of agricultural lands in the county increased more than 25 percent this year – from $13,986,780 in 2016 to $17,544,020.
“Actual value,” the amount the county assessor determines for all real and personal property, jumped from $48,228,760 last year to $60,495,070.
“In the 30 years I’ve been here, I’ve never seen it jump that much,” Larson said.
The sharp increase in assessed value could have immediate and lasting implications for ranchers and farmers in La Plata County who must continually navigate the dizzying labyrinth of the ever-fluctuating agricultural industry.
Young said she is protesting the county assessor’s determination after values on her land – for three separate parcels – went up 33 percent, 55 percent and 64 percent.
“I don’t know if we should be compared with the rest of the state,” said Young, referencing that the 10-year average is based on statewide market prices. “We’re in a remote area with our products, away from interstates and big cities.”
Young said she may have to put more animals on her property and lessen hay production to make up for the coming financial hit. Agricultural landowners won’t know how much their taxes increase until values are finalized.
Richard Parry, owner of Fox Fire Farms in Ignacio, said he, too, is protesting the assessment after property values on his roughly 910 aces went up $230,000 from last year.
Parry said if the county assessor’s value stands, he may have to raise more grapes and lambs, as well as try to cut expenses in an operation with little fat to cut.
“The pressure is on us to make up for it,” Parry said. “Taxes are like medical insurance, it always goes up and up and up and never goes down, so it’s very frustrating.”
As of Thursday, with one day left in the protest period, a representative with the county assessor’s office said Young and Parry are among only a few agricultural landowners who formally are challenging the new assessed value.
Larson said when he recognized the sharp increase was inevitable, he made a concerted effort to attend ditch and irrigation company meetings throughout the county, which are heavily attended by ranchers and farmers.
That outreach may have helped curb the surprise and potential of protests when letters came in the mail informing residents of the upcoming spike in assessed values – though agricultural landowners don’t have to be happy about it.
“Every time they take away your money it hurts, but what can you do about it?” said Bayfield resident Greg Morrison.
Ed Zink, who produces hay in the Animas Valley, said he has no sour grapes about the rise in property values. Still, he drew issue with the fact that residential values in the county, as well as throughout the state, seem to be favored.
In La Plata County, the assessed value for residential properties went up 10.4 percent. Commercial and industrial properties went up 9 percent and 5 percent, respectively. And vacant lands rose 6.1 percent.
“It would have been more fair if residential had come up a little more as well,” said Zink, referring to the Gallagher Amendment, a statewide formula that mandates residential properties can pay no larger portion of taxes than the previous year.
“It concerns me we continue on a statewide basis to subsidize residential,” Zink said. “But frankly, this is part of agriculture. You can’t control the weather, and you can’t control prices.”