Plum Creek Timber loses current use status for logging violations
By Peter Hirschfeld
Vermont Press Bureau | July 18,2010
MONTPELIER — The largest piece of privately owned land in Vermont has been expelled from the state's Current Use property tax program after environmental regulators cited the owner for improper logging.
Last winter, say regulators, Plum Creek Timber Co. Inc. violated its forest management plan by cutting too many trees on 140 acres in Lemington, in northeastern Vermont. The land is part of a 56,000-acre tract owned by the Maine-based forest-products company.
As is required under state law, Vermont officials said last week, the entire parcel will be withdrawn from the Current Use program that offers landowners substantial tax breaks on forest and farmland.
According to Bill Johnson, director of property valuation and review for the Vermont Department of Taxes, Plum Creek will pay an estimated $170,000 more in taxes annually, beginning in July 2011 for fiscal year 2012. Under state law, the company is not eligible to re-enroll in the Current Use program for five years.
“This is by far the largest piece of land ever discontinued from the program,” Johnson said. “And it will, over the next five years, have a fiscal impact on the state. That impact won't be huge, but $170,000 (a year) is significant.”
The sanctions follow a legislative session in which lawmakers sought to recoup $1.6 million of the money it sacrifices through Current Use, by levying a one-time fee on landowners enrolled in the program. Gov. James Douglas vetoed the bill.
The state's Current Use program, credited with conserving more than 2 million acres in Vermont by providing incentives against development, reduces taxes on farm and forestland by assessing taxes based on “use value,” rather than fair-market value. On average, landowners in Current Use save 88 percent on their tax bills.
Vermont spends about $10 million annually on Current Use to reimburse municipalities for revenue lost as a result of the difference between use value and fair-market value. The program costs the state's Education Fund an additional $39 million a year in forgone revenue.
The tax reductions enjoyed by Plum Creek are well below the state average; the use value is $122 per acre, and fair-market value on the 56,000-acre parcel is about $300 per acre. Still, expulsion from Current Use will see the company's tax obligations rise from about $85,000 a year to $253,000 a year. If the expulsion stands, Plum Creek will pay an estimated $837,000 in additional property taxes over five years. The decision can be appealed, and Plum Creek has indicated it will.
Violating its plan
Virginia Anderson, chief of resource management for the forestry division at the Department of Forests, Parks and Recreation, said heavy cutting by Plum Creek last winter ran contrary to a forest management plan it had submitted to the state.
All forestland owners must submit an approved management plan to qualify for Current Use.
“In a general sense, they said they were going to be taking so many trees out, and they took quite a bit more than they said they were going to,” Anderson said.
The heavy cutting may also have violated state environmental laws; the case is still under investigation, Anderson said.
Under state law, according to Johnson, the so-called adverse inspection Plum Creek received from state regulators means automatic expulsion from Current Use. Plum Creek owns 86,000 acres in Vermont. The rest of its land, also in Current Use, will not be subject to sanctions.
The 56,000-acre parcel spans eight towns – Averill, Avery's Gore, Bloomfield, Brighton, Brunswick, Lemington, Lewis and Morgan – in Essex, Orleans and Caledonia counties. The vast majority of the tract is in Essex County.
Plum Creek bought the land in the fall of 2008 from the Essex Timber Co. The land formerly belonged to the paper company Champion International and was the subject of the largest land-conservation project in the history of the state when the Vermont Land Trust acquired a conservation easement on it in 1999.
Mark Doty, community affairs director for Plum Creek, admitted that the logging operation in Lemington ran contrary to the company's harvesting plan.
“The adverse inspection we take responsibility for,” Doty said Friday. “There was heavier cutting than we'd planned, for sure.”
Doty said Plum Creek has taken steps to avoid similar mistakes, including the addition of a new forester to help oversee the property and heightened training for loggers working on the land. He said Plum Creek also has scaled back cutting on the parcel since the violations occurred as it works to identify what went wrong.
But Doty said sanctions should be limited to the 140 acres on which the improper cutting occurred, not the entire 56,000-acre parcel.
“Because the involved area represents less than one-quarter of 1 percent of the 56,604 acres determined to be removed from (Current Use), we think this is a unique situation,” Doty said by e-mail after being interviewed. “With that in mind, we are considering an appeal that will allow us to talk further with the Department of Forests, Parks and Recreation about the large number of acres being removed from the program.”
Natural Resources Secretary Jonathan Wood, whose agency oversees the Department of Forests, Parks and Recreation, said the improper cutting is not symptomatic of larger problems with Plum Creek, which he called an excellent land steward.
Plum Creek owns more than 7 million acres around the country and is the largest private landowner in the nation.
Wood said the management plans covering forest owners in the Current Use program ensure top-shelf stewardship of Vermont's forests. Because Plum Creek's land in Vermont is already under a conservation easement with the Vermont Land Trust, he said, residents can be sure it will continue to be managed well despite its removal from the program.
Doty said he expects that Plum Creek will continue to harvest timber on the affected parcel, but Wood says he worries that the company's increased tax burden could affect its operations in Vermont, perhaps hurting a local logging industry already hit hard by economic forces.
“I have a concern for all forest landowners and feel they are being generally overtaxed, and the Current Use program is the only mechanism we have right now to bring taxation even close to what is fair for forestland investors,” Wood said.
Over the winter, Doty said, the parcel supported 24 contracted jobs. Currently, he said, 10 contractors are working on the land.
“We plan to continue to manage these lands and the others we own in Vermont to the highest silvicultural standards,” he said. “We want Vermont to be proud of us.”