Giving away the farm

Fairfield County is classified a rural impoverished area in South Carolina, entitling it to various program goals that are designed to improve our “quality of life.” This classification allows residents, and other entities, to receive financial and program assistance above that given to more populated counties. These subsidizing government programs are supposed to elevate our quality of life. In the fifty or so years that these government programs have been in effect, it hasn’t happened!

We may have a low population density but we have an abundance of land, timber, and water. Historically, countries and regions with an abundance of these resources have prospered greatly. So, why hasn’t Fairfield County also prospered?

We have given away the farm.

Consider our Fairfield County timber resources. According to the SC Forestry Commission, Fairfield has the second highest percentage (90 percent) of land area in forestry resources of any county in the state. While far from the largest county in S.C. Fairfield ranks second in the value of total timber products produced, with $33 million in sales in 2010. The stumpage portion paid directly to landowners in 2010 was $15 million.

Of this $15 million, approximately 30 percent went to large corporations, including the forest products industry, national insurance companies, and some smaller entities such as pension fund investments. About 25 percent went to private investors such as doctors, lawyers and other business people.

Those groups do not reside in Fairfield or do business here, so the money they receive never shows up in any accounts within the County. Because many of these large timber corporations are headquartered in Atlanta, it’s fair to assume that there are more people in Atlanta owning Fairfield County land than there are Fairfield County residents owning land here.

Fairfield County residents receive less than 25 percent of the value of our timber resources. The other 75 percent goes to corporations and non-residents who don’t buy groceries here, use our local banks, eat at our restaurants or use any other local services. That money never benefits a single Fairfield County resident. Further, I have never heard of any of these non-resident businesses giving any philanthropic funds to our County charities.

Stopping this drain on our pocketbooks requires effort by our County Council that will not be popular with those whose tax rates increase. Land and timber are classified as “real property,” as are homes and other buildings, so non-resident timberlands should receive a higher rate the way we do second homes. Both are classified as real property and should be treated equally in terms of the burden placed on our resident population and government services.

These alien resource owners are allowed to do business here as a “farming enterprise.” Classifying these properties as farms is a misappropriation of the word. The IRS has strict guidelines as to who is a farmer. These people are not farming; they are operating large industrial wood products businesses. As such they should not be entitled to “agricultural credit” exemptions on their tax bills.

With the present method of calculating agricultural credit, the non-resident landowners are escaping paying taxes on over 90 percent of the market value of their property. That discount should be reserved for Fairfield residents. Outsiders should pay on the value of their holdings, just like any other business. The land outsiders own in Fairfield is simply a large warehouse for storing wealth that will eventually be removed from this County.

When some of these nonresident property owners face higher tax rates, they may invest their money elsewhere, providing our residents the opportunity to purchase some land at reasonable prices. When the wood products market improves, and that may be on the horizon, we will all benefit from the rich resources our County has. I’m not suggesting that every County resident will buy land. But, if land resources are locally owned, every business owner, regardless of his trade, will benefit from these “home grown/ home owned” resources.

If our county government implements changes to disenfranchise these non-resident “farmers”, it will provide Fairfield County with additional revenue and this additional tax money would allow County Council to reduce the tax burden on residents. It is also not unreasonable that taxes on primary residences in Fairfield could be eliminated completely. Think about it. Talk to your Council representative. Tell them it is time we quit giving away the farm.