Governor vetoes bill changing 'current use" tax breaks on land
Douglas says changes impose "additional taxes and burdensome bureaucracy"
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Gov. James Douglas |
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By LOUIS PORTER Vermont Press Bureau - Published: May 28, 2010
MONTPELIER – Gov. James Douglas vetoed a bill Thursday which would have made changes to the state's current use program, saying it would weaken, not strengthen, the state's efforts to keep land in farm or forest production instead of development.
It is not clear yet if lawmakers will return to Montpelier to attempt to override the veto and turn the bill changing current use into law. Various versions of the bill had overwhelming majority support: one version of the bill was approved by the House by a vote of 104-34. The Senate approved the amended version of the measure by 20-9.
But the amount of the budget hole left by the veto – about $1.6 million – is small compared to the entire state spending plan and legislators may decide to wait until January to re-examine the program.
The bill "greatly undermines the original intent of the Current Use program" and "imposes additional taxes and burdensome bureaucracy on the owners of our state's farm and forest land," Douglas said.
Many landowner advocates and other groups disagree with Douglas' assessment of the impact on the roughly 15,000 property owners who are in the Current Use program, which taxes enrolled property at its value as used for farming or forestry, and not potential development value.
"The entire bill was better than the status quo," said Jackie Folsom of the Vermont Farm Bureau. The measures contained in it would "make that program much more sustainable into the future."
One thing Folsom liked about the bill was that it increased computerized records for the program. And it set the stage for a study of some aspects of the program, for instance how farmers could be allowed to build housing for family members or farm workers on their property, she said.
Even a one-time $128 fee per enrolled landowner in the bill drew few complaints from the members of her organization, which advocates on behalf of farmers.
Outside of that one-time fee to meet a goal of spending $1.6 million less on the program, "unless you are going to be withdrawing land from the program there is no change in taxes or in the program," Folsom said.
But Gov. Douglas argued the bill harmed forest and farm owners when they are facing "the most daunting economic times in modern history." The bill changed how landowners are penalized for pulling their land out of the program in order to develop it, after having enjoyed to get property tax breaks.
Ed Larson of the Vermont Forest Products Association said Douglas did the right thing. Although penalizing those who remove their land from current use might force some forestland owners to keep their property in timber – and therefore mean more trees to log – it is primarily important to treat landowners well and not change the rules, Larson said.
"These landowners are the most important component in having a working landscape. If we treat them fair, they will treat us fair," he said. "If they feel like they are walking into a trap they are not going to participate."
"If they are going to build a house for their kids or have to sell something to stay above water so be it," he added.
According to Larsen, statistics do not back up the assertion that there is a problem with current use landowners "parking" their property in the program to get tax breaks, then later removing and developing it with little penalty.
"There was nothing in the bill we needed to do, there was nothing in the bill we supported," Larson said.
Agency of Natural Resources head Jonathan Wood agreed. Less than one-half of one percent of the land in the program is withdrawn each year, he said.
"It's a solution looking for a problem. There is simply not any evidence of that abuse," Wood said. "I find it hard to believe there are a large number of farmers in this economic condition who want to pay a fee and pay more of a penalty if they are forced to sell a piece of land."
The administration is willing to consider changes to some aspects of the program – for instance examining how property is valued – but those changes were not in the bill passed by lawmakers.
"We don't think there should be any changes at this time," he said.
The Vermont Natural Resources Council issued a statement saying the veto was the wrong way for Douglas to fall on the issue.
"Now, with this veto, we have a hole in the budget and lost an opportunity to address the issues facing the program such as cost, purpose, and administrative effectiveness," according to VNRC's statement.
"I am disappointed the governor choose to veto a bill that tried to address Vermonters concerns about those who might be abusing the current use system," said Speaker of the House Shap Smith, saying the effort was no different than lawmakers work to prevent people from abusing the income sensitivity program that gives residents a break on property taxes for education.
But Douglas said in his veto message that the unfairness to landowners who have already applied to the program, combined with the increase in fees and administrative difficulty of implementing the changes, meant he could not allow the measure into law.
As for the $1.6 million shortfall in the state's spending plan, that can be dealt with safely in next year's budget adjustment or if there are higher state revenues than counted on, he said.
Folsom said that her organization is committed to continuing the work on the bill.
"The Vermont Farm Bureau is dedicated to coming back next year and always trying to make that program stronger for our members," she concluded.
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