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In a TV ad, Democratic Sen. Bill Nelson is a down-home farmer in denim overalls, wielding a pitchfork and tending to six animated cows.
The point of the political attack: Nelson is using a farm facade to get out of paying his fair share of property taxes.
"After 40 years in politics, Bill Nelson has learned how to milk the system. He leased land that he owned for six cows, taking advantage of an agricultural tax loophole to dodge $43,000 in taxes just last year," says the ad from American Crossroads, the conservative super PAC founded by Karl Rove. "Then he sold the land for home development, pocketing at least $1.4 million."
The ad’s kicker: "Tax breaks and big profits for him, higher taxes for the rest of us."
This claim echoes past criticism from Nelson’s Republican challenger, U.S. Rep. Connie Mack IV.
The attacks stem from a February 2012 Tampa Bay Times story that scrutinized Nelson’s qualifications for a "greenbelt" property assessment, a designation that spares him from paying higher property taxes on his family’s 55-acre pasture along the Indian River in Brevard County. Thanks to the "greenbelt" designation, Nelson’s land is taxed at a much lower agricultural rate.
We wanted to examine the group’s claim that Nelson used six cows and a loophole to "dodge" $43,000 in his 2011 taxes. Whether he "sold the land for home development" is the subject of another check.
Nelson said the Crossroads ad is very misleading.
"Of course, they don’t tell you that that has been a cow pasture for 60 years," Nelson said in an interview. "That was my 4-H club project that started in the early ’50s and has been ever since."
When the Times story broke, Mack’s campaign rushed to create a singalong cartoon ad called "Udder hypocrisy." Before an animated barn, a hokey Nelson figure and six cows sang, "Bill Nelson’s farm’s the place to be / Just six cows and hypocrisy / Milking taxpayers like you and me / This is typical liberal hypocrisy."
‘An agricultural tax loophole’
The greenbelt law was enacted in 1959 as a financial incentive for farmers to keep their land instead of selling to developers who wanted it for highways, shopping malls and homes.
"It costs a lot to farm," said Adam Basford, the Florida Farm Bureau Federation director of legislative affairs. "And a lot of times people could see a higher use in that land for development."
Farmers are fond of the greenbelt law. Critics, though, say the law is too generous and too vague. The decision to tax land on the lower agricultural rate is determined by county property appraisers, who must weigh if the land is used "primarily for bona fide agricultural purposes." The lack of specifics in Florida law invites oft-documented abuse.
A 2005 investigative series by the Miami Herald chronicled several instances of property owners growing modest plants or paying ranchers to keep cows on their land to garner agricultural tax breaks on land they obviously intended to develop.
The classification also creates money gaps for counties that must be made up by other taxpayers or is lost. In 2011, nearly 248,886 properties were classified as agriculture on tax rolls, according to the Florida Department of Revenue. Even though the market value for those properties was $58 billion, the assessed value was just $5 billion.
The total lost tax revenues for local governments was about $969 million in 2011.
Nelson on the farm
Nelson’s camp says his situation is different than the abuses chronicled by the Miami Herald.
He gets a greenbelt designation for his Brevard County pasture because he leases the land to small-time cattle owners. The current lessee, cattleman Jeff Darby, has a herd of about six cows and leases the land free of charge, though he is required to keep up with maintenance.
The land has been in Nelson’s family since 1924. It’s been a cattle pasture since 1960, including when Nelson raised and sold a herd of cattle to pay for his education at Yale University.
Nelson has said he is not abusing the designation because he is preserving the land and keeping it in his family. He used to live in a home attached to the property but sold it when he moved to Tallahassee to serve as Florida’s treasurer and insurance commissioner.
Still, the savings is considerable. Without the designation, he would have paid 13 times the amount of taxes that he did in 2011.
In 2011, the market value of Nelson’s property was $2.76 million. Nelson got the lower agricultural value of $210,870 in 2011. Instead of paying $48,380 in property taxes, he paid nearly $3,696.66, according to tax records, a difference of more than $44,000.
The Brevard County property appraiser’s office has tried to remove Nelson’s greenbelt designation in the past, but Nelson fought to keep it and won in court. (An inspector in 1999 went to his property and found no cows; Nelson argued they escaped via a hole in the fence.)
Contrary to the ad’s suggestion, Nelson is not shirking his tax responsibility, a spokesman said, nor is he covertly planning to develop or resell his land.
"You are not dodging taxes when you pay all the taxes that are owned on the property," said Dan McLaughlin, his spokesman.
Those who scoff at the size of the herd grazing there now should know it’s on par with most cattle businesses in Florida, McLaughlin said. About one-third of Florida farms, or 7,165, are comprised of fewer than nine cattle or calves, according to 2007 federal data.
One expert told the Times that Nelson is making an effort to "maintain some aspect of what’s a heritage family site in agriculture."
"I think that would be something that the state would encourage," Stan Geberer, who works for Fishkin & Associations, a Florida economic consulting firm, told the Times.
The ad’s claims and figures about Nelson’s tax bill and Brevard County property are rooted in a report from the Tampa Bay Times. It’s accurate to say that Nelson was shielded from paying about $43,000 in property taxes because of his land has a greenbelt designation.
The group emphasizes that Nelson is leasing the land, though the Times story is clear he does not charge for the Melbourne farmer to graze cows there.
We think American Crossroads is stretching the truth by claiming Nelson is "dodging" his taxes. That’s a derogatory phrase commonly used for someone who doesn’t pay what they owe. That’s not the case here, though people may disagree with Nelson paying the lower agricultural rate based on the presence of six cows on a vast pasture.
We rate this claim Half True.
Tampa Bay Times’ The Buzz blog, "Super PAC hits Bill Nelson over ag property," Oct. 2, 2012
Tampa Bay Times, "Sen. Bill Nelson benefits from Florida’s generous ‘greenbelt’ law," Feb. 15, 2012
Interview with Sen. Bill Nelson, Oct. 2, 2012
Interview with Renee Watters, Department of Revenue spokeswoman, Oct. 8, 2012
Connie Mack website, "Mack on Nelson’s Tax Shelter: "Appalling, Disgraceful, and Everything Floridians Loathe About Limousine Liberals,’" Feb. 14, 2012
Connie Mack’s YouTube account, "Udder hypocrisy," Feb. 17, 2012
The Atlantic, "America’s Dumbest Tax Loophole: The Florida Rent-A-Cow Scam," April 17, 2012
Interview with Alex Minchenkov, USDA National Agriculture Statistics Service public affairs specialist, Oct. 9, 2012
USDA National Agriculture Statistics Service, 2007 Census of Agriculture state data for cattle and calves, accessed Oct. 9, 2012
Interview with Dan McLaughlin, Nelson spokesman, Oct. 9, 2012
Interview with Bryan Gulley, Nelson spokesman, Oct. 9, 2012
Interview with Lance Larsen, Brevard County Property Appraiser chief deputy, Oct. 9, 2012
Brevard County Property Appraiser’s Office website, parcel information for Bill Nelson, accessed Oct. 9, 2012
Brevard County Tax Collector’s Office website, 2011 property tax record for Bill Nelson, accessed Oct. 9, 2012
The Miami Herald, "How developers cash in on farmland," Aug. 21, 2005
2012 Florida Statutes for agricultural assessments
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