Jan. 27–Judy Crum and her husband, Denny, have sunk most of the money they've earned over the years back into the soil of their 500-acre Frederick farm.
Everything from equipment to fuel is expensive, so it was easy to do, she said. But reversing the process is not so simple.
"I can't go get a bucket of dirt and take it to the grocery store to buy a loaf of bread," Judy Crum said.
Many farmers are in the same boat, say state legislators from Frederick County. And for the land-rich and cash-poor, Maryland estate taxes can be costly enough to knock a farm out of a family's hands.
State leaders announced Thursday that Democrats and Republicans are working together on estate tax relief for farming families, a measure that should help them pass their land down through generations and keep the fields from disappearing under roads and subdivisions.
The bipartisan proposal would exempt up to $5 million of a farm property from the Maryland estate tax.
Only the first $1 million of an estate now escapes the 16 percent tax on assessed value, and a 2007 U.S. Department of Agriculture count found 503 farms in Frederick County worth more than that amount.
As things stand, children can find themselves saddled with thousands of dollars in costs after their parents die. They sometimes must sell part or all of their land to pay the state, and as a result, development eats away at agricultural acreage.
"When a person who owns a farm passes, too often the farm is lost to congestion and to sprawl," Senate President Thomas V. Mike Miller Jr. said at a Thursday morning news conference announcing this and other bipartisan bills.
Senate leaders would offer the estate tax exemption as long as the land remains a farm for 10 years. If the owners convert the land, they would have to repay the full estate tax when they sell the property, according to the proposal.
Sen. Ron Young is introducing a similar version of the relief bill in the Senate.
"It's become very difficult to pass the farm from father to son or father to daughter or even from one owner to the next because of the taxes," Young said Thursday at the briefing as Sens. David Brinkley and Rob Garagiola stood behind him.
In the other chamber of the legislature, Delegate Kathy Afzali sponsored an estate tax relief bill.
Afzali, who introduced the same bill last session but did not see it pass, said with legislative leaders and Gov. Martin O'Malley backing the plan, she has high hopes that it will succeed this year.
"I'm ecstatic. Let's hope it gets done," she said in an interview.
Afzali is editing her bill so all agricultural property would fall outside the estate tax as long as it stays farmland for 10 years, she said. The 2011 proposal — and the bill now sponsored by Young — offered $5 million of exempted property and cut tax rates on additional property to 5 percent.
Last session, state analysts reviewing Afzali's bill estimated the tax break would cost Maryland $2.3 million in lost revenue over the first fiscal year.
But the measure is needed in the agricultural community, say Judy Crum and representatives of the Frederick County Farm Bureau.
Crum and her husband are slowly giving their three sons some of the land, which is no longer used for dairy farming but for agro-tourism and growing wheat and corn, she said. But the process is laborious and expensive.
Pieces of Crumland Farm were sold to help pay taxes levied on the land when it passed from her in-laws to her and her husband. Crum said her husband's parents, dairy farmers who started buying their land in 1940, prepared for the costs, but many others do not plan ahead.
"It's a very touchy subject," she said. "It's hard for a child to say, 'What's going to happen to the farm when you die?' … I think (the tax exemption) makes it much easier to go ahead and pass the land down."
