Today the Bulletin published a column I wrote about some of the hindrances faced by landowners who would like to forgo their allocation of irrigation water and help restore the Deschutes. In short, the irrigation districts would rather keep the water in their systems. There can also be tax penalties for not irrigating in some cases. Of course, we taxpayers continue to subsidize the irrigation districts. It does not seem right to me. See below for the full column.
The Basin Study Work Group is wrapping up its multiyear effort to look for ways to return water to the Upper Deschutes. Piping leaky irrigation canals has long been acknowledged as a key part of this effort, but the work group has also identified more cost effective, complementary and quicker to implement “on farm” solutions.
A hundred years ago water rights were granted to large farms when Central Oregon was an agrarian economy. Over the years many of these have been subdivided, and today the average parcel in Central Oregon Irrigation District is only 11 acres. A work group study discovered that a significant percentage of these irrigators would be willing to lease their water for other uses, including returning it to the Deschutes, if they were allowed to do so.
My wife and I have seen this issue firsthand during our search for acreage in the county. One recent example is a 20 acre parcel east of Bend with a great view and nice house with 15 acres of irrigation. To call this farmland would be a stretch of the imagination. It has poor, rocky soil that has been used as pasture for horses. We are not horse people and thought we would give the water back to the Deschutes, letting the land return to a natural state.
Unfortunately, irrigation districts no longer allow water to be permanently returned to the Deschutes. They are in the business of delivering water and want to keep the water in their systems. The districts have also put a cap on temporary transfers to the river, allowing for a smaller amount than was returned to the river than in the past. Further, even if a temporary transfer is allowed, the districts require continued payment for the allocated water even when the water is not used.
Another issue has to do with land that is in farm deferral. This means property taxes are a fraction of what they otherwise would be as long as the land continues to be used as “farmland.” Water rights are not required for farm deferral, but it’s pretty difficult to have a farm without water. Dry land grazing is possible, but it’s a short season with limited income potential.
Loss of the tax deferral would cause a property reassessment to current market value, leading to a dramatic increase in property taxes. The Deschutes County Assessor told me that bare land that might be assessed at a market value of $30,000 an acre could have a $300-an-acre assessment if in farm deferral. Loss of the deferral would also create a potential lien on the property equal to 10 years of back taxes for the difference between the old tax rate and the new one. That lien would only be paid if the land was permanently removed from production, but the threat is there.
To date, the irrigation districts have been given millions of federal and state taxpayer dollars to subsidize canal piping. Hundreds of millions of additional taxpayer dollars will be required to complete the planned piping over a period of decades. It would be quicker and more cost effective to allow landowners with water to return it to the river. They should not be charged by the irrigation districts for water they do not use.
A change also needs to be made in tax policy. Clearly, the going forward tax rate should be reassessed if farmland no longer qualifies for the deferral. An exception for the back taxes lien should be made, however, if the land goes out of farm production due to returning water to the Deschutes. A landowner should not face a significant tax bill for providing a benefit to the river and all Central Oregonians.
Food for thought the next time you vote or interact with elected officials.