Committee hears that expanding current-use to include equine farming could cost state millions

The Joint Fiscal Office told the Senate Finance Committee that a bill to expand "current use" tax treatment to include equine farming could increase state costs and shift tax burdens, potentially reducing education property tax revenue while increasing general-fund hold-harmless payments to municipalities. Ezra Holden of the Joint Fiscal Office said the office focused on two sections it considers fiscally significant and opted for a conservative (higher) range to avoid underestimating the potential impact.

Holden said the office ‘‘assumed that the overall fiscal impact in fiscal year 2028 could be between 4.6 and 10000000,’’ and estimated that within that range ‘‘anywhere from 1.3 to 2,800,000 is estimated to be the increased general fund uses from the . . . current use,’’ while ‘‘approximately 3.3 to 7,200,000’’ would be reduced education property tax revenues from expanded enrollment. He explained that building enrollments (which can be assessed at 0% of market value if the owner qualifies as a farmer) drove much of the high-end estimates, while land is assigned a statewide use value ($537 per acre in FY2026 under current use).

Committee members pressed on how the bill defines eligibility. Under the language described by Holden, a parcel could qualify for current use for equine farming if an individual earned at least $2,000 in gross income from equine farming in one of the prior two or three calendar years for parcels under 25 acres; parcels over 25 acres would need an additional per-acre income threshold, and an "equine farmer" would be someone who derives 50% of income from equine farming and who owns or boards at least four equines.

Members highlighted data gaps and practical concerns. Several said the agricultural census used for estimates likely undercounts nontraditional equine operations, and that hobby owners running a few horses on small parcels could meet the numeric thresholds even if they are not commercial operations. The Chair warned against ‘‘exempt[ing] somebody’s pony in the backyard’’ and urged the committee to consider tightening acreage or income thresholds so the benefit targets business-scale operations rather than family or hobby circumstances.

The Joint Fiscal Office emphasized that not every newly eligible property would enroll and that the office used ranges to reflect that uncertainty. The committee agreed to continue discussions and requested more precise fiscal analysis and potential drafting changes to narrow eligibility before taking further action.