MONTPELIER — A legislative effort to reform the state’s premier land conservation program has again fallen by the wayside.
Supporters of changes to the Current Use tax program say abuses of the system have fueled perception problems that threaten to undermine public support. But while most people have begun to acknowledge the existence of a problem, lawmakers can’t seem to agree on a fix.
Woodstock Rep. Allison Clarkson has dedicated a good deal of her last three terms in office to the issue. She says that’s for good reason.
“This program … supports an over $4 billion economic engine, which is all the things that come out of our working lands,” Clarkson said.
The program allows owners to pay taxes based on how the land is used — such as farming or forestry — instead of its maximum fair market value. Owners whose land is enrolled in Current Use temporarily forfeit development rights in exchange for drastically reduced tax bills. And proponents say it’s prevented the state’s rural character from being overrun by commercial development.
But the program now costs the state nearly $60 million annually, mostly in the form of lost tax revenues.
Clarkson says abuses of the system are rare. But she and others say they’re tarnishing Current Use’s public image. And she and others say that could make the program an increasingly attractive target for cuts.
“So one of the most important things we needed to do was restore integrity to Current Use … and restore the public’s confidence in this program, which we’re all helping finance,” Clarkson said.
For the third time in five years, the Vermont House this year passed legislation that would increase penalties for removing land from the program. The bill is designed to thwart the developers who game the system by enrolling in Current Use land that they have no intention of conserving. In some instances, developers can save more on their tax bills than they’d pay in withdrawal penalties by parking their land in the program for as little as 220 days.
But while prospects for a deal with the Senate seemed bright as recently as a few weeks ago, division within the Senate has now cratered any hope of a compromise.
“The real frustration is we haven’t seen any action now for the fifth year to come to a resolution about how to keep this program growing and stabilize it, and also deal with some of the perceptions that there are ways to abuse the program,” said Jamey Fidel, with the Vermont Natural Resources Council.
The issue of penalties is a sensitive one. Essex-Orleans Sen. Bobby Starr said he refuses to sign on to any reform that might create hardship for cash-poor landowners who need to withdraw land from Current Use so they can sell it and pay bills.
“And as people get older and they’ve been in for a long period of time, I don’t feel if they get to the point where they need to sell off a few acres to survive on, that they should be forced to pay a real high penalty,” Starr said.
Starr was amenable to heightened penalties on landowners who withdraw land shortly after it’s enrolled. But when his Senate colleagues sought higher penalties for all withdrawals, no matter the term of enrollment, Starr demurred, and hopes for a deal were dashed.
Clarkson said a heavier hand from the Shumlin administration is one way to finally break the legislative gridlock. If nothing gets done soon, Clarkson said, she fears Current Use will fall victim to the budget hatchet the next time the state’s finances decline. Fidel said lawmakers might also resort to caps on the program — as the Senate proposed earlier this year — something he said could prevent the conservation of important lands.
“No one wants to touch it because it’s, as we have seen, politically charged. Doesn’t mean we shouldn’t try,” Clarkson said.
Commissioner of Forests, Parks and Recreation Michael Snyder said it’s unlikely the administration will adopt a more hands-on role in the legislative process anytime soon, at least when it comes to the land-use withdrawal penalty.
Snyder said it’s true there’s a perception problem and that the state might be well served to tweak regulations to address it. But he said Vermont needs to be careful not to do any harm, something residents voiced concern about in a series of public hearings last year.
“This is a massively important program, and though it may have some blemishes here and there, don’t mess it up too much,” Snyder said. “We heard that from a lot of people, and we take that seriously.”
Snyder this session did manage to get two smaller revisions to the program, which will give his department greater flexibility when it comes to easing sanctions on owners of forestlands who fail to meet management-plan renewal deadlines, and allowing more ecologically significant lands into Current Use.
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