Perhaps the most obscure question that S.C. voters will find on the Nov. 2 election ballot is Statewide Constitutional Amendment No. 2, which concerns property-tax assessment ratios for farm land. The Sun News recommends a yes vote on the amendment. Here's why.

The taxation article of the S.C. Constitution provides that real property in other categories be taxed according to its market value: how much an owner could get for a given property on the market.

Agricultural land, in contrast, is taxed on its use value: how much income it produces for its owner via farming, ranching or timber production. This populist plank, a vestige of the Reconstruction era, is aimed at keeping people from being taxed off their farms because of rising land values.

The constitution also provides that taxes on agricultural land owned by individuals or corporations with 10 or fewer shareholders be based on 4 percent of its assessed value. The tax base for larger corporate farms is 6 percent of their assessed value - also a reflection of the populist thinking of the Reconstruction era.

Amendment No. 2, then, would remove the 10-shareholder constitutional limit on corporations that own agricultural land - spreading this 4 percent assessment-ratio tax break to more owners of farm land. The amendment would empower the S.C. General Assembly to decide whether there should be an upper limit on how many shareholders a corporation could have before becoming subject to higher property taxes.

The newspaper supports the amendment mainly because much of the farmland in South Carolina, including land in Horry and Georgetown counties, has been held by families for many generations. In such families, the 10-shareholder limit becomes more of a problem with each successive generation, making it difficult to settle estates without selling off family land holdings.

An ancillary reason for supporting the amendment has to do with commercial and residential development in fast-growing areas of the state, including the Grand Strand.

As The Sun News reported several months ago, many owners of local land slated for eventual development pay taxes on its agricultural-use value -
not its market value, which is much greater.

In our coastal communities, much such land is in timber. Current S.C. Department of Revenue rules don't require much timber cutting to take place for a landowner to be eligible for the agricultural tax break - even though the land potentially has high market value. This strikes many local residents as an undeserved tax break for land-owning companies - though raw land, in fairness, has little market value until a developer plats it and runs in streets and utilities. Moreover, there is no way to close off this tax break for developers without hurting farmers.

Here's the problem: Developable land owned by individuals or companies with 10 or fewer shareholders qualifies for the 4 percent tax-assessment ratio. Comparable land owned by larger corporations, however, is valued at the 6 percent tax-assessment ratio - meaning that the owners pay higher taxes.

Why should one group of owners of land for development get more favorable tax treatment than another? A yes vote on Statewide Constitutional Amendment No. 2 on Election Day can level the development playing field while helping S.C. farm families hang onto their land.