Borough Votes That Farm Buildings Will No Longer Be Taxed
By Ian C. Larson
On Oct. 3, Fairbanks North Star Borough residents voted in favor of Proposition 2, which will exempt some farmers from paying property taxes on their buildings.
As defined by the proposition, exempt buildings must be used solely for the growing, storage, or processing of crops intended for human consumption, or the storage and processing of feed for animals used in farming activity. Structures used to store dairy or stable dairy animals are also exempt. Buildings used to store farm equipment such as tractors or to house livestock meant for consumption are not included. As a final requirement, the farmer must make at least 10% of their gross yearly income from farming activity.
Prop. 2 passed with 78% of the vote and the support of seven of nine borough assembly members. Assembly member Savannah Fletcher was one of four members that drafted Prop. 2., and a vocal supporter of its passage. Fletcher is also a candidate for borough mayor. Fletcher said the point of Prop. 2 was “to encourage better food security, and more people to grow food in our borough.”
Alaska imports about 95% of its food supply, and it is estimated the state would run out of food within five days if supply lines were interrupted. Inspired by shortages during the COVID-19 pandemic, Gov. Mike Dunleavy established the Office of Food Security in September, 2022, with the mission of expanding food production statewide.
The idea that became Prop. 2 was conceived by Sam Knapp, a local farmer in the Cripple Creek area. Knapp owns and operates the Offbeet Farm, which specializes in winter-storage crops such as carrots, beets, and gourds. While researching tax codes for a new cold-storage building last spring, Knapp stumbled across a state law that allows boroughs to exempt farm buildings from taxation. At that time, no borough in the state had passed such a law. After consulting with a lawyer, Knapp decided to bring his idea before the Borough Assembly.
Sam Knapp processes carrots at Offbeet Farm
Photo by Sam Knapp
“They hadn’t seen it,” Knapp said, speaking of the state law.
The Fairbanks North Star Borough will be the first in Alaska to exempt farm buildings from taxation. The borough already has a law exempting farm land.
Knapp’s proposal has been well received by many local farmers; farmers like Callen Christensen, a UAF student who owns and operates The Island, a year-round greenhouse in the Goldstream Valley.
“I think it’s a no-brainer way to subsidize local producers of food,” Christensen said. “The benefit highly, highly outweighs the cost.”
Despite passing with an overwhelming majority, Prop. 2 isn’t without its opponents. Aaron Lojewski is the presiding officer of the Borough Assembly, and is also a candidate for borough mayor. Lojewski was the only assembly member to vote against putting Prop. 2 on the ballot, listing an increase in the borough’s mill rate (property tax rate), increased workload on borough staff, and the potential for manipulation as reasons for his opposition.
“When you exempt any group, that’s not free . . . the cost is paid for by others,” said Lojewski. “This will help farmers . . . and those who know to jump through the hoops. I personally know two people . . . who are abusing the system.”
Rows of crops at Offbeat Farm
Photo by Sam Knapp
According to Lojewski, the borough’s reliance on outside food supplies is an inevitable consequence of the local climate. He believes the borough should focus its economical efforts on what it is most suited towards and embrace trade as a good thing.
“I’m not against farming,” Lojewski said, adding, “It’s not the government’s role to manage their businesses and make money for them.”
Despite concerns of manipulation, Knapp doesn’t believe it would be easy to take advantage of Prop. 2.
“It’s more difficult to do than he (Lojewski) realizes . . . I don’t think it’s possible.”
Knapp said that in order to gain an exemption a borough assessor must visit the building and make a determination based on their best judgment. As per the wording of Prop. 2., the building must be “used exclusively for farming activity, or purposes directly related to farming activity.” Knapp isn’t even sure if his own building (the one that inspired Prop. 2) will qualify because he stores some equipment in the attic.
The Borough Assembly is scheduled to certify elections on Oct. 26; once certified, Prop. 2 will become law. Farm buildings would then officially join the borough’s list of fully tax-exempt properties, which includes various nonprofits, the homes of disabled veterans, and the homes of those 65 and older. Details on obtaining a farm-building exemption are not yet available, but residents can find applications for all other exemptions on the Borough Assessing Office’s website; most applications are due March 31.
Construction of the new cold-storage building at Offbeet Farm
Photo by Sam Knapp
Although happy about the passage of Prop. 2, Knapp hopes there will be more efforts to incentivize farming in the borough. Knapp believes that by continuing to encourage new farmers and helping existing farms expand, the borough can increase overall food production and reduce its dependency on out-of-state resources.
“This is a toe in the door,” Knapp said. “A tangible success would be having someone who wants to start a farm can . . .and it doesn’t take 10 years.”
Borough Assessing Office: https://www.fnsb.gov/162/Assessing
Sources:
Sam Knapp, Offbeet Farm: (218) 348-2023 offbeatalaska@gmail.com
Savannah Fletcher, FNSB Assembly, Seat F: (425)-442-2163 Savannah.Fletcher@fnsb.gov
Aaron Lojewski, FNSB Assembly Presiding Officer, Seat H: (907)-978-1766 Aaron.Lojewski@fnsb.gov
Callen Christensen, The Island: ctchristensen@alaska.edu