House backs $1.6 million cut to Current Use program
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By Peter Hirschfeld VERMONT PRESS BUREAU - Published: January 27, 2010
MONTPELIER – A state program credited with preserving millions of acres of forest and farmland from development became the first prominent example of the fiscal year 2011 budget crisis facing lawmakers, with House members Tuesday giving tentative approval to cuts in the so-called Current Use program.
Even lawmakers who helped draft the $1.6 million in cuts – which include a one-year moratorium on new enrollees and a more severe penalty for withdrawing land from the program – say they're loath to proceed with reductions to what is widely regarded as the state's premier land conservation tool.
But fiscal realities, lawmakers said, will necessitate cost-cutting measures in virtually every government program. The Use-Value Appraisal Program – the statutory name for Current Use – dramatically lowers property taxes on farm and forest land by appraising it based on its actual use, rather than its fair-market development value.
"I don't think anyone in this room liked voting for the moratorium," said Rep. Adam Greshin, a Waitsfield independent on the House Ways and Means Committee, which crafted the proposed legislation. "But it was the least bad of a number of bad ideas."
The "least harm" argument was convincing enough to win the bill overwhelming approval in a preliminary voice vote on the House floor Tuesday morning.
The measure still faces strident opposition from logging interests, which say the proposed changes could sound the death knell for a tax program that has single-handedly propped up the state's sagging timber industry.
The moratorium, according to Ed Larson, head of the Vermont Forest Products Association, will "cut off at the knees" the hundreds of landowners that have invested in some cases thousands of dollars to prepare the land-management plans necessary for new enrollments.
And the increased penalties, others argue, will compel people to withdraw land from current use for fear of heavier financial sanctions down the road.
The Legislature's own Joint Fiscal Office projects that the rule change will result in 3 percent of total current-use acreage being pulled from the program. The fair-market tax rates on those 63,000 acres, according to John Meyer, a forestry consultant from Calais, will essentially force landowners to develop that land.
"That's the equivalent of three Calaises, or three Woodburys, coming out of Current Use and going to fair-market value and, guess what, developed," Meyer said. "Is that good policy to change current use law that will directly compel 63,000 acres of development?"
Meyer, whose clients owned a total of 30,000 acres of Current Use land primarily in Washington, Lamoille and Orleans counties, said the pitfalls could be twofold. Not only will loggers lose access to land pulled from Current Use, he said, but the landscape will be newly marred by the development that would follow.
The impacts, Meyer said, could be far-reaching enough to undermine the integrity of the entire program.
"It's a shot in the foot to the program and probably a shot in the head," Meyer said. "I'm appalled by it, frankly, and I can't understand this rush to judgment."
Lawmakers call the proposed cuts an attempt to save the program from more draconian reductions proposed in last year's budget, which at one point called for cuts of more than $4 million in Current Use. The $1.6 million worth of reductions in the fiscal year 2011 budget, they said, is part of compromise package intended to save Current Use, not jeopardize its future.
Many lawmakers support the land-use change penalty anyway, saying the penalty for withdrawing land is so paltry now that some developers "park" land in Current Use with no intent for long-term conservation.
Rep. Cynthia Browning, an Arlington Democrat, is considering an amendment that would replace the one-year moratorium with an across-the-board per-parcel fee for Current Use beneficiaries. Her idea would see existing Current Use enrollees pay in the range of $100 per parcel, a plan she said would distribute the impact of the cuts more equitably.
It's a concept favored by Larson, but one that lawmakers say could hurt the program by opening up a "Pandora's Box" that would see landowners hit up for new revenue annually.
The program costs the state about $10 million each year. The money goes to reimburse municipal governments for foregone tax revenue due to the lower property valuations. Some say those lower valuations also cost Vermont an additional $35 million in foregone revenue to the state's education fund.
peter.hirschfeld@rutlandherald.com
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