Wyoming ranchers lean on tax break to keep pricey properties
JACKSON, Wyo. (AP) — Upon hearing Laura Meadows utter their names, Norman and Handy pushed off toward the Linn family’s small pasture pulling a sleigh full of hay.
The two stout, blond Haflinger horses knew the drill, easily jerking forward hundreds of pounds of cured grass cut off the Serenity Ranch last summer. The hay was bound for the rumens of nine Salers cattle and a handful of rescue donkeys and llamas that hang with the herd. On this Wednesday in late January, Norman and Handy were cooperative and obedient as they went about their afternoon routine. That’s not always the case.
“These guys are just really bad,” Meadows said. “They’ll push you over. They’re terrible little ponies.”
Her dad, Gene Linn, seized on the chance to pile on: “They’re little devils,” he said. “They can open gates. Norman can take his halter and bridle off.”
But without this afternoon routine of wrangling stubborn horses, the Linns would risk losing an agricultural land status that saves the longtime Jackson family from a potential six-figure property tax bill. The Linns are among 200-plus landowners in Teton County motivated to keep up an agricultural designation. The property tax formula creates an incentive to raise livestock or crops, which in cases like the Linns’ protects open space from being subdivided into 35-acre tracts.
“This herd of cows saves us pretty close to $100,000 a year,” Linn told the Jackson Hole News & Guide. “It’s just ridiculous.”
Without the agricultural tax break that comes from raising and selling cattle, the Linn family wouldn’t be able to keep their 120-acre spread on the Snake River’s West Bank, he said.
“It would be fire sale time,” Linn said.
But the ranching life isn’t ideal and can lead to conflicts with wildlife. Laura Meadows is torn about the lifestyle she’s been cornered into and blunt about her family’s predicament.
“I think it’s pretty terrible,” she said. “I don’t want to feed cows every day, but how else are we going to keep our ranch? We love it here.”
Neither Linn, who’s 73, nor Meadows, a part-time veterinarian and mother of two, necessarily want to be haying cattle every day. Their primary help comes from Laura’s husband, Dwayne, who otherwise spends his days being a father and running a small nonprofit organization, the Wyoming Wildlife Federation. Hiring help isn’t a great option, because the cattle operation is about a wash financially.
“Dwayne drives, I drive, my dad drives,” Laura Meadows said. “Even today, it was like, ‘Who’s going to go?’”
Meadows and her siblings are not considering selling out, and so life goes on with a routine of Norman, Handy and eight hungry cows plus a bull that need their daily rations. Her children, she said, ought to have the same opportunities that she had growing up, whether that’s harvesting an elk on the property or just playing in the cottonwood groves and willows lining the Snake River. The Linn Ranch’s roots reach back more than a century, tracing to 1905.
“For the next generation,” Meadows said, “we are dedicated to maintaining what our parents have given to us.”
Each Teton County family with land classified as agricultural has its own story and method for maintaining the property’s tax status. Some keep up eligibility via commercial cattle operations, like those on ranches run by the descendants of some Jackson Hole homesteaders. A few property owners graze and keep horses, selling enough steeds or foals to meet the agricultural tax requirements set by Wyoming law. Others hay their land and send the bales to market.
Regardless of the mechanism, there’s supposed to be legitimacy to the agricultural operation, which is verified by Teton County Assessor Melissa Shinkle.
“Ag is supposed to be the primary purposes of the land,” Shinkle told the News&Guide. “It’s not a hobby. To get an agricultural designation, that should be the primary use.”
The financial benefits of maintaining agricultural tax status are especially stark in Teton County. Property taxes in Wyoming are typically predicated on the estimated value of the land itself, but when a tract is in agriculture the valuation is instead based on the land’s output. So the bill reflects the value of livestock sent to slaughter, or crops sold at commodity prices.
“It’s not taxed market value, it’s taxed at what that land can produce in terms of agriculture,” said Brian Judkins, administrator of the property tax division at the Wyoming Department of Revenue.
On top of the significant savings achieved through that filter, the taxable value of the agricultural products is then shrunk about tenfold — calculated at the fractional rate of 9.5%. To determine property taxes owed, that number is then multiplied by the mill levy in Teton County, which averages out to $5.70 per $1,000 of valuation.
When the equation starts out with the proceeds from 40 acres of cut hay or a small cattle operation, the tax bills are minimal. For Wyoming ranchers and farmers whose margins are already thin, those breaks can be critical to staying afloat financially. For land-rich, cash-poor families dwelling in a place like Jackson Hole, the structure also has the effect of helping to keep land in the family.
The Linns, for example, used Wyoming’s family subdivision exemption to carve out 3 acres for Dwayne and Laura Meadows to someday build a home, and last year their tax bill came out to $19. If they lost the agricultural status, the property tax bill for 3 acres of prime real estate along the Teton Village Road would pencil out to more like $4,000 a year, Gene Linn estimated.
A noteworthy component of the agricultural tax code is that eligible landowners are supposed to make the most of the land. The valuations, according to Wyoming Statute, are to be based on the “capability of the land to produce agricultural products ... based on average yields of lands of the same classification under normal conditions.”
Wyoming completes an agricultural land valuation study every year that’s used to determine what the rates should be per acre, whether it’s irrigated cropland or marginal rangeland. Dropping a single heifer on a large spread or haying one small swatch of an expansive pasture does not jibe with tax code and could compromise eligibility. The same goes for growing hay to feed horses or livestock on the same property that are not sent to market — it doesn’t cut it.
But cutting and selling hay, according to Shinkle, is the most common way of maintaining eligibility for the agricultural tax rate in Teton County.
That’s how Bill Robertson maintains agricultural standing for the 84 acres of pasture his family has owned in Hog Island for more than a century. Once a summer the 65-year-old outfitter cuts the grass growing down below his home at the foot of Munger Mountain, then lets it dry, rakes it and bales it. In a typical moisture year he’ll come up with 50 or so tons. Although that might fetch $8,000 or so when he sells it, it’s more work than it’s worth if not for the benefits of having his land valued as agricultural.
“It’s a tax write-off, is what it is,” Robertson said. “I put way more effort and time and money into it than it ever produced.”
The hay is sold mostly locally. Having to feed his own horses, Robertson then takes a drive every year to replenish his haystack.
“You’ve got to follow the rules,” Robertson said. “I go to Afton and haul hay back home.
“That makes a lot of sense,” he added wryly.
Haying is about all that’s left of commercial agriculture in Hog Island, a southern swath of Teton County that recently welcomed Munger Mountain Elementary School and has been eyed for dense development, including on Robertson’s own land. Thirty years ago Hog Island was legitimate cow country. Robertson estimates there were 500 head of cattle in the area as recently as 1990, split between his own herd, plus those of the Evans and Ross families.
“Now there isn’t a (overwintering) cow on Hog Island, that I know of,” Robertson said.
Shinkle is in the process of auditing all 240 agricultural tax accounts in Teton County, an exercise born partly by scrutiny from the Wyoming Department of Revenue. Her office is trying to “clean up inconsistencies” and make sure landowners are legitimately engaged in agriculture. Historically, the Teton County assessor has done little to ensure landowners are meeting the intent of state statute other than verifying that they’re hitting the minimum benchmarks for agricultural sales: $500 if sold directly or $1,000 if the land is leased.
“That was always being enforced in this office,” Shinkle said. “What wasn’t being enforced was that the land use should be consistent with the land size, location and capability to produce.”
Upon further review, more than 12% of the accounts — about 30 so far — could lose their agricultural tax status. That includes some guest ranches, dude ranches and landowners whose lots are governed by homeowners’ associations with covenants that explicitly prohibit agriculture.
“But primarily, people who are coming out are people who say they’re producing hay,” Shinkle said. “I’d say hay is one of the biggest areas of concern.”
Still, the vast majority of the landowners are on track to maintain their agricultural status, a tax benefit that has often been maintained for generations. At the Linn Ranch on the West Bank, that means nine black cattle will continue being fed every afternoon.
Besides the not-always-desired daily routine with the testy Haflinger horses, the operation can create other conflicts. A small herd of elk has been raiding the Linns’ hay lines for much of the winter, a source of anxiety for the family in addition to jacking up the feed bill.
“I’m in conservation, but the solution is not as cut and dry as a lot of folks would think it is,” Dwayne Meadows said. “Say if we get brucellosis in the herd. Then we’ve got to buy a whole new herd within a year, so we don’t lose our ag tax.”
Brucellosis is a transmissible disease that causes elk and cattle to abort their first-born calves. It’s been eradicated from much of North America, but a reservoir persists around the Greater Yellowstone Ecosystem and its high concentrations of elk on feedgrounds. When cattle mix with elk off feedgrounds and catch brucellosis, producers are subject to an arduous quarantine, test and slaughter process.
As Laura Meadows, Gene Linn and Norman and Handy the horses put out hay on that late January afternoon, a handful of elk were bedded down on the property to the south. That night a friend of the family with an area 78 hunting tag killed one of the elk on the Linn property. Although having a few elk as neighbors might not sound bad to a typical Jackson Hole resident, for someone trying to feed nine cattle they’re a major pain.
“We ran them off several times last night,” Linn said. “The horses are a little friendlier to them than the cows are.”
For now the Linns plan to stick with the status quo because it works. But at the same time, Dwayne Meadows said, they’re “heavily investigating” other options, whether that’s selling chicken eggs, growing raspberries or switching their cow-calf operation to yearlings that don’t need to be kept through the winter.
Whatever the family decides, the land-use formula has to meet the agricultural tax requirements. They can’t afford the alternative: land valued at the rate of residential properties in the neighborhood.
“For us this land is valuable,” Dwayne Meadows said. “It’s everything to us, but the value has nothing to do with what the assessor says or what someone at Sotheby’s says. The value is that the family’s been on it for 100 years.”
So for now the Linn family’s afternoon haying operations will carry on. Laura Meadows remembers her childhood days of being towed by teams of horses while hay was flaked off the sled. Her involvement then was two parts playing, zero parts helping — a tradition, with some tweaks, that she’s now passing on.
“We don’t do it with this team, but when we feed with the tractor we let our kids tie sleds behind,” Meadows said.
Gene Linn, who’s been at it the longest, gets his own kicks out of watching the kids playing during haying. He thought back to one of his son Peter’s childhood friends, a Morley boy, who used to come by from time to time to sled behind the team.
“I’d tell him, ‘OK now, no yelling,’” Linn recalled. “And as soon as we would start, he’d just start screaming and he’d scream the whole time. I’d think, my God, if a kid can have that much fun, I guess I can put up with it.”