MONTPELIER — The Senate this fall will convene a series of off-session hearings aimed at gauging public appetite for reforms to the state’s premier land-conservation program.
Since being enacted by the Legislature in 1978, the Current Use program has been credited with preserving more than two million acres of farm and forestland by reducing dramatically the property tax burdens on undeveloped parcels.
But while the program has helped minimize annual tax overhead on farmers who might otherwise be compelled to develop pristine agricultural lands, critics say it also contains loopholes that developers have been able to use to extract financial benefits for which the program was never intended.
The Vermont House earlier this year passed legislation aimed at doing away with the “parking” of parcels in Current Use — a practice wherein developers enroll their land in the program temporarily while in the planning stages for a future subdivision.
The bill would solve the problem by increasing penalties for removing land from Current Use to levels sufficient to deter the alleged practice.
Sen. Tim Ashe, a Chittenden County Democrat/Progressive, said the Senate plans to run the proposal through several committees before forging its own version of the House legislation. A Senate panel that includes the chairmen of the committees on agriculture, natural resources, and finance will begin that process, Ashe said, with a series of four public hearings in September and October.
“Some people have a very negative reaction to changing Current Use, because they see it as an attempt to erode the program,” Ashe said.
About 17,000 individual properties — more than a third of the state’s land mass — are enrolled in Current Use, and proposed reforms to the program inevitably draw controversy. Gov. James Douglas in 2010 vetoed a Current Use bill that would have, among other things, increased penalties on the withdrawal of land.
But as statewide education tax rates soar and lawmakers look for ways to broaden the tax base, the program is again under the magnifying glass, largely as a result of its impact on rates. The program costs the state more than $10 million annually in general fund money — dollars used to reimburse municipalities for lost tax revenue. The program costs Vermont an additional $35 million a year in foregone revenue to the state education fund.
“We’re trying to figure out what might be a good consensus approach forward, if any, on Current Use reform,” Ashe said.
The House bill would establish a tiered penalty structure, so that people who enroll land in the program for only a few years would pay much stiffer sanctions than those who keep their land in for decades. The measure is intended to deter people with development plans from taking advantage of tax reductions despite having no intention of long-term conservation.
Ashe, however, said, “there are some in the Senate who say that’s backward.”
“And their thinking is, if the land has been in Current Use for a long time, you receive more of a tax benefit, and therefore the penalty should be greater, because other taxpayers made a bigger investment in that land, and we should make it harder to take out,” Ashe said.
Ashe said the Senate panel might also look at the issue of over-valuation of Current Use property. Some lawmakers believe the program gives municipal property assessors an incentive to over-value parcels in Current Use, thereby artificially inflating reimbursement levels for lost tax revenue from the state.
The committee will hold hearings from 7 to 9 p.m. at the following locations: Sept. 24 at Lake Region Union High School in Barton; Oct. 1 at Bellows Free Academy in St. Albans; Oct. 8 at Ferrisburgh Central School in Ferrisburgh; and Oct. 15 at Riverside Middle School in Springfield.
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