Greed isn’t a new imperative for Simpson Timber co. But transparently thumbing the eyes of its neighbors may be. The privately held corporation has decided to charge $250/yr. for vehicle permits to enter its forest lands in Mason County–limited to a couple of hundred. Other permits will allow entering on foot for $125/yr., also limited editions.
The corporation enjoys property tax rates of 10 cents (sometimes as low as 5) on the dollar for what residents would pay for the same holdings without the commercial timberland exemption law passed in the 1930’s in response to industry lobbyists. The company owns roughly 20% of the acreage in Mason County (i.e. by far the largest private holder) but, pays almost nothing in property taxes. Still, sympathy for the Devil requires a sober look at what would become of these vast tree farms without such tax incentives…massive housing tracks and shopping centers a la Lacey, WA? There’s also the issue of some miscreants using Simpson land, et al, as their personal free dump site (including Simpson itself!). This is likely a result of the exorbitant fees associated with the County’s official dump site.
Readers can read more about this obnoxious policy, including reactionary comments from local residents at KMAS Radio’s web site.
The property tax exemption on timberlands resulted from legislation passed in 1971, which transferred authority over to the Washington Dept. of Revenue. Prior to that time timberland was taxed by the assessor of the host county, at full market value. Also worthy of note is that Greed Diamond has a new president, Doug Reed, a man who oversaw their 400,000 acre operation in Northern California, much to the chagrin of environmentalists. A new day is dawning for Greed Diamond, and there is every reason to believe it will be a pay day.
Tom, as a Realtor, you’re an astute observer of cronyism in government. However, you’re missing some pieces of this particular picture, though your consternation is well taken. The legislation you reference is part of the ‘Open Space’ tax deferral/forgiveness law for qualifying real property. Moreover, it only requires a 5 acre minimum (among other variables) to qualify while the more generous Commercial Timberland legislation tax deferral/forgiveness law passed in the 1930’s requires a 20 acre minimum. Having had property designated under the latter, I’m keenly aware of the differences, pros, and cons. Let me opine on a few as follows:
Washington State’s Open Space legislation passed in the wake of the 60’s environmental movement had 3 major qualifying categories: 1) Open Space agricultural, 2)Open Space recreational, and 3) Open Space Timberland. All were designed to provide real property holders an incentive to not develop/sub-divide their land. It was an effort to encourage maintaining the rural nature of non-urban communities/land. Whether it is now redundant given the Growth Management Act is an open question. It has the advantage of reducing a real property holder’s property tax liability by 33% from what it would otherwise be under the full market value assessment. One had to keep the land in that designation for at least 10 years for the tax deferrals to become irrevocable…a 10 year ‘tail’ if you will. If one took the property OUT of said program, the back taxes that had been deferred (up to 10 years) had to be repaid, including cumulative interest, at the highest and most current market value of the property. The parcel(s) had to be contiguous to meet the 5 acre minimum. One could qualify if one was willing to provide a public easement for recreation under the Open Space-recreation program. If one had the acreage covered with timber and intended to keep it as such, it could qualify under the Open Space-timber program. If it was determined that the 5 acres was being actively used (for profit) for agriculture (income documentation from it required) it could qualify as an Open Space agriculture buffer against urbanization.
The advantage of the Commercial Timberland sweetheart legislation of the 1930’s was as follows:
While a minimum of 20 acres was required, it only needed to remain in that status for 7 years instead of 10, the tail being 3 years shorter, for the benefits to be bankable. Moreover, if one took the parcel out early, there was NO interest due (I believe) and the back taxes were calculated on what the market value of the parcel was during the year in which the owner enjoyed said property tax advantages instead of the current full market value as in the Open Space programs. Finally, and most important, the tax deferral/forgiveness amounted to 90% of what the normal tax rate based on full market value would have been otherwise. The program does require a commercial tree harvest plan on file. Mine was to allow the trees time to become ‘old growth’ (500 years?) before harvest and it was accepted (in the late 1970’s) by the tax assessor, who appeared to be the arbiter of what was accepted into the program then. Again, with the more recent Growth Management Act, perhaps the 1930’s legislation is obsolete. On the other hand, it has the advantage of not effectively depriving citizens of private property rights without compensation under the guise of ‘regulation’. It PAYS the property owner (and is not mandatory!) for those attributes of the undeveloped land the public would like to preserve. In principle, I agree an owner should not be deprived of private property rights without just compensation. The Commercial Timber and later Open Space tax programs had that advantage. I abhor the Growth Management Act because it does not.
Thank you John; I am well versed in the history of open space/timberland conservancy efforts driven by, and to advantage, big timber companies like Greed Diamond. As is typical in such cases, those who benefit little from a tax exemption will wage the war for those who benefit greatly.