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Growing up in New York State in the Wallkill Valley has made me realize the value of land. It's expensive! My father has told me that no one really owns land, but instead rents it. He was referring to the exorbitant taxes he pays each year in the Town of Gardiner in Ulster County. Similar to renting, if my father fails to pay, the land is taken away. It's that simple. The property tax issue becomes significantly worse if you are a producer and wish to make a living off the land. Certain costs are fixed, such as taxes and maintenance operations that must be paid for each year whether tending a forest for a local source of timber, apples, or a small organic vegetable farm. What happens when these fixed costs become too expensive? The land may have to be parcelized, which usually leads to development and fragmentation, or rights are sold away in a conservation easement. The entire property may have to be sold in fee to another buyer. As a result, parcels become smaller, more development occurs, and the community is stripped of those landowners who produce locally grown products. The community becomes a consumer-based one that will need to procure resources and products from elsewhere. Is this sustainable?
In the 1970s, the Vermont State Legislature faced this issue head on. The legislature heard testimony that farm and forestland was being sold for development because the property tax bills could no longer be supported by the returns from working the land. In order to help mitigate this situation, the legislature enacted the Use Value Appraisal (UVA) program. Traditionally, land such as in New York State is assessed by its fair market value or highest and best use. Market value is determined by recent sales of comparable land. Therefore, if someone can afford to buy a parcel that is similar to yours near your property for more money, your property can be reassessed for a greater value and create an increase in your property tax bill. The UVA program shifts the assessment from a market value to a value that the property is currently being used for. If the property is currently being used for forest management that creates a crop of timber or for cropland, it is assessed on this value instead. For this reason the UVA program is also known as the current use program.
In order to be eligible for the program a landowner must have at least 25 contiguous acres. However, a minimum of 2 acres are excluded if a home is on the property. Therefore, 27 acres is the minimum acreage for enrollment. The property owner must hire a private consulting forester who develops a forest management plan. The forest management plan must be followed and trees must be cut when appropriate. A report must be filed with the state detailing management activities, and the state must be allowed to inspect forest management practices to ensure good forest management standards are being upheld. Farm land can be eligible in the program too, but does not require a management plan or inspection of the property. Farmland that is enrolled in current use can be less than 27 acres if the sale of crops grosses $2,000 annually. If an enrolled property owner does not comply with the current use criteria, he or she can be charged a Land Use Change Tax.
Overall, the program has been greatly successful in Vermont and has helped preserve its working forests and farms. One of the fixed costs of management, such as property taxes, has been held lower so that profit margins for sustaining locally grown businesses and economies are more feasible and sustainable.
New York State does have programs for forest and farm owners. However, there are some key differences. First, forest owners who want to enroll in the New York State Forest Tax Law (480a) program in order to re-assess the value of their property to forest land must have 50 forested acres. In Vermont the minimum is 27 acres. This eliminates most forest owners, since the average parcel size in the Catskills is already approximately 16 acres. Agricultural assessments exist in New York as well, but farmers must gross $10,000 annually. In Vermont, the minimum is $2,000. In New York if a town does not have at least 3 percent of its parcels enrolled in the 480a program, lower tax bills on enrolled property is shifted to neighboring properties in that town to make up the difference since the town still requires tax revenue. In Vermont, the state picks up this burden and reimburses the assessment difference to all towns.
Vermont has taken progressive steps in meeting the property tax issue and preserving its working farms and forests. This problem in both states will continue to worsen as more people move to rural areas and demand more services that require higher tax revenues. Parcel sizes in both states continue to decrease, while the number of parcels increase, often leading to land that is more difficult to manage for production forcing local markets elsewhere. In New York the remedy to this situation has been for our public agencies such as the State of New York to acquire forest preserve lands in the Catskill and Adirondack Parks. However, this land is taken out of production and resources have to be acquired from, yet again, somewhere else. For example, most New Yorkers buy their maple syrup not in the Adirondacks or Catskills, which have plenty of sugar maples, but from Vermont! Why? Well, working landscapes have been preserved which lead to sustainable forest and agricultural practices and sustainable local economies and communities. A comparison of Adirondack and Catskill communities with those of Vermont would show that Vermont is still ahead. Another example would be the paper companies of the Adirondacks that have packed up and left behind vacant buildings and ghost-towns. In New York we are building museums about old wood products businesses that used to be vibrant, paralleling healthy communities. In Vermont, they are making things. In New York, we are looking at our forests as museums. In Vermont, they are managing them, because they can afford to. We need real property tax reform if we truly want to be environmental stewards of our region and state. The old notion of fence and forget inside a preserve is not working. We can do better! Find out more about how to manage your forest @ www.catskillforest.org or give us a call @ (845) 586-3054.
Information provided in part from Northern Woodlands: The Place You Call Home: A Guide for Caring for your Land in Vermont. "Current Use: Property Tax Program Helps Keep Working Land Well-Managed."