URBAN EXPANSION, PROPERTY TAXES, AND DAIRY FARMING NEAR MADISON, WISCONSI

This study examines the spatial distributions and interrelationships among land values, property taxes, and the incidence and viability of dairy farming, all in relation to distance from the center of the growing city of Madison, Wisconsin, during the period 1945 to 1975.;The context for the study is the apparently widely held belief and frequent claim that there exists around an expanding city a spreading wave of increasing property taxes which is unrelated to the value of the land for farming and which results in premature withdrawal of land from farming. Wisconsin in 1977 became the forty-third state to attempt to deal with the apparent problem by modifying tax policy. Despite widespread concern for remedial measures, however, an examination of published research led to the conclusion that there is a need for definitive empirical studies of the real spatial and causal relationships among land values, property taxes, and farming near cities.;The environs of Madison, Wisconsin, were selected as the study area. The city has expanded rapidly into a rich agricultural area dominated by dairying which, because of its needs for long-term investment in herd and facilities and for consistent labor, is especially sensitive to urban expansion. A systematic sample of farms stratified by distance from the city center was selected within a transect extending outward for 33 miles.;The study attempts to determine whether the following urban peripheral zones exist, and if so, what are their spatial and causal interrelationships: (1) a zone in which the market or taxed value of land exceeds its value for agriculture, (2) a zone in which the property tax on land places a financial hardship on farming, and (3) a zone in which disproportionally taxed land is being taken out of dairying well in advance of its use for urban purposes.;For each of the sample farms, taxable values and taxes on land were determined from official records, values of land for agriculture were computed from detailed maps and evaluations of soils in relation to the prevailing usages for dairy farming systems, and net cash farm incomes were derived from income tax records. The incidence of dairy farming was determined from various sources and mapped for the entire transect for the years 1945, 1960, and 1975.;The analysis only partially supports the claimed need to modify tax policy. Specifically, a zone of land speculation was identified, but it appeared late in the study period and was smaller than expected. For most of the study period the market value of land was well below its calculated value for agricultural use. Had a policy of taxation according to use been in operation, taxes on a few farms near the city would have been lower but those on many farms farther out would have been higher. A zone where the property tax was rising faster than farm income was identified, but it too was smaller than expected and its "confiscatory" nature questionable. Beyond this zone farm incomes rose faster than property taxes. The need to modify tax policy, based on this analysis, is weak at best.;Finally, a zone where farmland was taken out of dairy farming well in advance of urban use was identified, the location of its leading edge related to the growth rate of the city, and its future location predicted. All zones were spatially related, but only those of land speculation and rising property taxes were causally related. The premature withdrawal of dairy farming appeared to be caused by farmers' perception of impending urbanization and its impact on their financial planning, rather than by high property taxes.