A New Mexico Tax Break to Help Subsistence Farmers Is Also Going to Wealthy Homeowners in the State’s Largest County

A New Mexico law providing a tax break meant to help subsistence farming throughout the state has also been granted to “hobby farmers” and wealthy landowners who don’t farm at all and use water meant for crop irrigation on what are expansive yards in the state’s most populous county, according to a study published last week by the University of New Mexico School of Law’s Natural Resources Journal.

So-called greenbelt laws were passed around the country during the 20th century to help contain urban sprawl and preserve agricultural land. New Mexico passed its own in 1967, helping preserve green spaces statewide and in Bernalillo County, home to Albuquerque, through the tax break to non-commercial farming operations. 

But the law has enabled some landowners to receive the tax break while not meeting the criteria for subsistence farming, according to the paper. Meanwhile, the county government that administers the tax break doesn’t cooperate in its oversight with the local water district, which has failed to consider water usage meant for agriculture under the tax break by those who are not engaged in subsistence farming, a crucial concern given the ongoing drought in the Southwest, the paper said. 

“We, as communities, through our state legislature, our county governments and our water agencies, need to think carefully about the suite of laws that we have and whether they are sufficient to help us adapt to climate change, or whether they are maladaptive,” said John Fleck, a coauthor of the study and a water policy expert at the University of New Mexico School of Law’s Utton Center. 

The paper found that about a quarter of land parcels that received the tax break were enrolled in the Middle Rio Grande Conservancy District’s irrigation system. In 2020, the researchers estimated that resulted in 4,388 acres of land in the county using 11,000 acre-feet of water. “This is equivalent to nearly a quarter of the county’s entire 2020 municipal water use, enough for approximately 40,000 homes,” the study’s authors wrote. 

Receiving an agricultural evaluation from the county under the greenbelt law saves landowners an average of $1,608 on their property tax bills, the paper found, and has helped preserve green spaces throughout the region that likely would not exist without the law. 

But nowhere does the statute require tracking of the water needed to support what are supposed to be subsistence farming operations. “The County reports that it tracks the tax program but not related water usage, and the District reports that it manages irrigation but does not consider the tax program,” they wrote. Unlike many irrigation districts in the country, Fleck said, the Middle Rio Grande Conservancy District does not have the ability to track the actual volume of water each property uses. 

“It is no longer responsible stewardship for policies that affect water resources to avoid scrutiny, as New Mexico’s future planning and resiliency efforts move further into an era of aridification and shrinking water supplies,” they wrote. 

Getting the tax break is “determined on the basis of the land’s capacity to produce agricultural products,” according to the law. Court cases involving the statute, the paper’s authors wrote, ruled that those enrolled in it should be using the land for subsistence farming, defined by the National Agricultural Library as a “farming system where the food and goods produced are predominantly consumed by the farm family and there is little surplus for sale in the market.”

But the paper found instances of properties receiving the tax break without meeting the criteria, as defined by the statute itself, as well as in court rulings or municipal regulations. Through analyzing data from the Middle Rio Grande Conservancy District and the county, the authors found 101 properties receiving the tax break and using irrigation water on what the Middle Rio Grande Conservancy District calls their “yards.”

To confirm the findings, Fleck and Annalise Porter, the study’s lead author and a graduate of UNM’s Water Resources Program, visited some locations and “found a combination of straight-up yards” and properties with crops like crops alfalfa that were mislabeled, Porter said.

Fleck took extensive bicycle tours around Albuquerque, he said, where he found neighborhoods with lush yards and trees where homeowners were receiving the agricultural tax break. “My bike riding was crucial to this process,” he said. 

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He spoke to a homeowner in a yard and learned that the man watered the yard from an irrigation ditch behind the home, which led the team to look into yards receiving both the irrigation water and the tax break. 

They found that some of the yards receiving tax breaks fell within the boundaries of the Village of Los Rancho, an affluent community in Albuquerque’s North Valley which had 219 total properties with the agricultural valuation in 2018. “This, and the mere existence of the ‘yard category,’ lend to the assertion that the tax program may not be currently used as was originally intended by legislature,” the authors wrote. 

Porter said the law is just one example of the siloed thinking lawmakers often exhibit when constructing policy in complex areas involving land use and water rights. The state’s greenbelt law is written as tax policy, but also touches on water usage and urban growth. 

Porter and Fleck agreed the law is well-intentioned, but communities must reevaluate the tax break and related use of water intended for crop irrigation to address heat, drought and water scarcity related to the climate crisis. 

The irrigated water some of the parcels receive comes from the Rio Grande, which ran dry in Albuquerque for the first time in four decades this past summer. The state also relies on water from the Colorado River, which is in the midst of more than 20 years of drought. Recent negotiations over Colorado water rights resulted in tensions among stakeholders over how to save a  system that powers millions of homes across the Southwest and has helped fuel growth in the region with its water. 

“There’s less water because of climate change,” Fleck said. “And that means there will be less green.”

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