In 1974, in an effort to preserve farmland in the commonwealth, the Pennsylvania state legislature passed Act 319, creating the Clean and Green program. The program provided tax breaks to farms and farmers whose tax bills may have become too onerous to keep operating.
Thanks in part to that 50-year-old law, family farms remain part of the Pennsylvania landscape.
However, a number of wealthy individuals — who do not engage in commercial farming — also benefit from the tax break while not serving the program’s originally intended purpose. In 2018, the Morning Call found that the program cut property taxes for “millionaires living in country estates, and golf courses, quarries, and other non-agricultural business.”
State Senator Judy Schwank, minority chair of Agriculture & Rural Affairs, says that while the program has been successful, it’s also abused by wealthy individuals with “the wherewithal to buy a large parcel of land.”
“They may not necessarily have a career as a farmer,” Schwank told WHYY News. “That’s not their occupation. They just simply want to live on a large acreage perhaps, or to own that, and then also get the tax breaks as well.”
According to Clean and Green records, one of those wealthy property owners benefiting from the program is Republican nominee for U.S. Senate, David McCormick, who owns hundreds of acres in Hemlock Township in Columbia County.
Although McCormick has said multiple times he is “not a farmer,” he has been availing himself of that tax relief for what he calls his “family farm,” Frosty Valley Farms, which was listed as Frosty Valley Farms, LLC in 2018.
“I don’t pretend to be a farmer,” he said at a Building America’s Future event in Catawissa in February. “That’s an honorable distinction that you have to earn.
Much of the property has been in the McCormick family for decades. It sits just a few minutes from Bloomsburg University, where his father, James H. McCormick served as president from 1973 to 1983. However, Frosty Valley Farms LLC has applied for Clean and Green credits for parcels of land acquired in just the last few years. McCormick calls himself the owner of Frosty Valley Farms, and in 2022 said he had owned the land for more than a decade or more, adding he has been personally paying the taxes on it.
In 2022, McCormick defended himself against accusations that he was really a Connecticut resident, running a carpetbagger race for the U.S. Senate seat that eventually went to John Fetterman, partly using the property as evidence that he maintained ties to the state for the 15 years he voted in Connecticut.
“That family farm I mentioned, I own — so, I’m a Pennsylvania taxpayer,” he said in an interview with WILK in 2022.
However, according to public records, the Clean and Green program reduced his annual property tax obligations by as much as $64,000 last year, an estimated break on 76% of his tax obligations for the farm.
Despite being designed and designated for farmers, property owners also don’t need to farm to avail themselves of the tax rebates. The program also provides relief for land in “agricultural reserve” and “forest reserve” — land that simply won’t be developed.
Coincidentally, Dr. Mehmet Oz, who beat McCormick for the Republican nomination in 2022 coincidentally — or ironically — faced similar criticism after buying a $3.1 million Montco manor that was already registered with Clean and Green immediately after announcing his campaign.
Oz defended the practice, saying he had “inherited” the designation. That points to the issue that, once a property is in the Clean and Green program, the owner never has to reapply.
Even though it’s a state program, it’s usually rural towns that are affected by a lower tax base and, therefore, a loss in revenue. This has sometimes meant an impact on local services. At a 2009 House Agriculture and Rural Affairs Committee meeting, then-Representative Bryan Cutler, a Republican who represents Quarryville, addressed the issue, specifically citing the impact on local education budgets, including in his own district.
“There is no greater teacher than being required to fund school districts and their operations with a smaller and shrinking tax base,” he said. “We are simply asking for the attention to be given to the issue so that those rural school districts that are most affected by Clean and Green could also have some increase in their overall funding that’s available for their school districts.”
In that same meeting, Thomas Newcome, who was serving as Superintendent Of The Octorara School District, told the committee his schools “had over $5 million in lost revenues with 319.”
“The poorest population in our county is bearing the responsibility to provide Clean and Green space for the county while our wealthiest areas bear little of the responsibility to assure (sic) there is green space,” he said.
The Allentown Morning Call published an in-depth investigative series into the areas affected and found “tax shifts” in which other taxpayers were forced to make up for the loss in revenue.
“Four communities in rural Northwestern Lehigh School District experienced a $6.2 million Clean and Green tax shift in 2016-17 — a sixfold increase over 1994-95,” the paper reported. “That tax shift pushed the average homeowner’s property tax bill up by 30 percent in 2016-17, an added $1,055 in school, county, and municipal taxes.”
Hemlock Township — where McCormick’s property is located — recently raised property taxes by 17%. That came after significant increases in 2019 and 2022, as well.
Albert Hunsinger, Jr., a town Board of Supervisors member, told WHYY News that rising costs — to expand the police department and other town services — prompted the increase.
However, he adds that the Clean and Green program means the agricultural zones — which comprise the vast majority of the town’s land — can’t be taxed to help make up the difference and, there, much of the burden is passed on to private residents with smaller properties. He adds that tax rebates through the program are applied too liberally, providing the benefit to property owners who provide little benefit to the town.
“It means they have to mow their property twice a year in order to get the tax rebate on it,” he jokes, adding “they’re not farming it, they’re not getting any revenue off of that ground other than what they get from the state through the Clean and Green program.”
According to the law, changes to the property would violate the terms if landowners make any changes to the property. If that were to happen, they would be required to repay seven years of rebates.
Recently, it appears that Frosty Valley Farms leased at least 164 acres to a solar company, Prospect14 which, according to its website, partners “with landowners who are interested in realizing income on their land from solar power project development.” Building a solar farm would constitute a change, but according to aerial photos conducted by WHYY News, there are no signs of one.
Some of the property is also rented out to residential tenants.
WHYY News reached out to the McCormick campaign Sunday morning for information about how the land is used but has yet to receive responses about activities on the farm. WHYY News also contacted Prospect14, but the company has not yet responded. The state Department of Agriculture also declined an interview request.
In his last role before running for Senate in 2022, McCormick drew a salary of $22.5 million as CEO of Connecticut-based hedge fund Bridgewater Associates. According to his latest financial disclosure, McCormick and his wife Dina Powell own at least $123 million in assets. If elected, he would become one of the wealthiest members of Congress.
The annual budget of Hemlock Township is currently around $2.4 million.
Schwank would like to see the law updated for the modern era to where it is focused on farmers and can’t be as easily abused by wealthy estates.
“It’s not breaking the law necessarily to take advantage of them, but you need to look at where we are today versus when this was created when there were not as many wealthy people buying estates as there are now,” she said. “Maybe there’s a sliding scale in terms of the tax abatement that someone receives, depending upon whether they’re actually farming themselves or if they’re renting the farmland out but they’re not actually farmers. That’s the way I would like to see the program changed.”
Hungsinger agrees that there should be some changes and says more agricultural output would benefit the area.
“I would sooner see the farmers lease them out and get the ground producing rather than letting it sit in Clean and Green,” he said.
Read more from our partners, WHYY.
