Recently, Governor Douglas returned H.485, An Act Relating to the Use Value Appraisal Program, without his signature. As Secretary of Agriculture, I supported this action as did Secretary of Natural Resources Jonathan Wood.

Vermont’s Agricultural and Managed Forest Land Use Value Program, better known as the Current Use Program, was created in the late 1970’s. Current Use allows agricultural and managed forest lands to be taxed on their use value as opposed to market value.

The Current Use program benefits not only landowners but the entire state of Vermont. We know from a recent study that 97 percent of Vermonters want an open, working landscape. Our landscape, in many ways, defines our state drawing thousands of visitors every year to experience what we enjoy each and every day. In fact, National Geographic Traveler Magazine voted Vermont one of the top five places in the world to visit, and the number one place to visit in the United States. One of the primary reasons for this distinguished recognition was Vermont’s open landscape.

The legislation as passed by the House and Senate would have created a dramatic increase in both the Land Use Change Tax and the Property Transfer Tax. The increase in the Land Use Change Tax alone would have been more than 10 times the existing rate. I understand, like those advocating the legislation, that changes to the program may be needed in the future, however now is not the appropriate time for such changes.

The financial strains and uncertainties our farmers are facing, especially dairy farmers, is unprecedented. The economic recession that has impacted many of us has perhaps hurt our rural communities more than others. H.485 would impose additional taxes and requirements on our agriculture sector at a time when they are struggling under already significant burdens.

Vermont’s working landscape defines our state. We owe our strong cultural identity to the farm and forest landowners who steward these lands. The future of the working landscape is threatened now more than at any other time by the current financial crisis. Adding additional taxes and requirements to our already compromised agriculture industry would have a detrimental impact on farmers in the state and the open working landscape we all treasure.

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June 1, 2010

CONTACT:

Tom Cheney, (802) 828-2245

Gretchen Kruesi, (802) 828-3806

Speaker Smith and Senate President Pro-Tem Shumlin Announce Decision to Not Return to Override Veto of Current Use Bill

Montpelier, Vt. – Speaker Shap Smith and Senate President Pro-Tempore Peter Shumlin announced today that the legislature will not return to override Governor Douglas’ veto of H. 485, An Act Relating to the Use Value Appraisal Program. Rather than bring the legislature back at taxpayer expense, the legislative leaders pledge to make this issue a top priority of the next legislature.

“The current use bill addressed the very real concerns of Vermonters that the current system is being used by some to subsidize development,” said Speaker Smith. “We are disappointed the Governor was unwilling to respond to these concerns. It will be a top priority of the next legislature to restore the current use program to its intended purpose of promoting the working Vermont landscape we all know and love.”

“We had a lot of success working with the administration on a variety of issues this year,” said Senator Shumlin. “It is disappointing that one of the last acts of the Douglas/Dubie administration will be contrary to that cooperative spirit and leaves the state budget out of balance.”

In addition to ignoring the problems in the program, with this veto the budget is now $1.6 million short and forces the legislature address this budget gap next year. The legislative leaders believe it is fiscally prudent to wait until next year to solve the new gap, rather than bring the legislature back June 9th at a cost to the taxpayers.

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Thomas Cheney
Aide to the Speaker of the House
115 State Street
Montpelier, Vermont 05633-5201
Office: (802) 828-2245
Fax: (802) 828-2220

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Contact:

Thomas Cheney, Office of the Speaker (802) 233-1378

Gretchen Kruesi, Office of the President Pro Tem (406) 570-8586

Speaker and President Pro Tem celebrate enactment of landmark health care reform bill and voice disappointment with failure to address concerns on Current Use

Montpelier, Vt. – Senate President Pro Tem, Peter Shumlin, and House Speaker, Shap Smith, celebrated that S.88, An Act Relating to Health Care Financing and Universal Access to Health Care in Vermont, will become law. They expressed their disappointment that Governor Douglas decided not to sign this far reaching health care reform legislation.

The Senate President and Speaker also voiced disappointment that Governor Douglas vetoed H. 485, An Act Relating to the Use Value Appraisal Program, and the failure to address concerns in the current use program.

“S.88 builds on Vermont’s strong foundation in health care,” said Speaker Smith. “The federal health care bill recognized that states could move forward to address concerns about financing of healthcare and this bill will do just that.”

“Vermonters throughout the state are struggling to pay their property taxes as they fight joblessness and stagnant incomes,” said Senator Shumlin. “Why the Governor would choose to subsidize developers instead of helping struggling, hard working Vermonters puzzles me.”

The Speaker, Senate President and legislative leaders are discussing all of the options after hearing this disappointing news.
Gretchen Kruesi
Aide to the Senate President Pro Tem
gkruesi@leg.state.vt.us
802-828-3806

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Percent Current Use 2009

Our map of the week illustrates one of the many ways to see the impact of the Vermont’s current use program on a community and the state. The data is from the 2010 Annual Report from the Division of Property Valuation, Vermont Department of Taxes. The ideal representation would be to include the percent of a community in federal, state, or community owned land area as well. This is apparent with a closer look at the map. Communities with large tracts of Federal land have some of the smallest areas enrolled in the Current Use program. In addition our more populous “urban” or “suburban” communities also rank low.

Download a PDF of the Percent Current Use 2009 map

The Green Mountain National Forest preserves a large swath of the state. Looking at the list in the table of communities with a larger than 60% of land area in current use, 7 of the 22 are farm-based. The rest of the list is primarily forested communities.

For more details, the 2010 Annual Report can be found at: http://www.state.vt.us/tax/pvrannualreports.shtml.

Map prepared by Katie Budreski and David Healy, Stone Environmental Inc., Montpelier VT 05602, 802.229.1870, kbudreski@stone-env.com or dhealy@stone-env.com.

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May 19, 2010

Contacts: Steve Jeffrey, Executive Director, VLCT 802-229-9111

Towns Call on Governor to Support Current Use Legislation

MONTPELIER, Vermont (May 19, 2010) – Today representatives from the Vermont League of Cities and Towns (VLCT) and the Vermont Assessors and Listers Association (VALA) strongly urged Gov. Douglas to sign H.485, a bill which makes targeted but critical reforms to the Current Use law. They were joined by members of the farm and forestry community.

Gov. Jim Douglas has not yet indicated whether he will sign the legislation.

The Current Use program allows farm and forest land owners to have their property assessed at “use value” for property tax purposes. There is general agreement that the law has been highly effective in encouraging landowners to manage their land long-term for timber and agricultural products.

H.485 corrects certain problems that have emerged in the 30 years Current Use has been in effect. It reestablishes the development penalty as an effective deterrent to short-term enrollments, and funds the administrative conversion from paper to electronic files and digital maps. In addition, it creates a one-time $128/owner surcharge to meet the Legislature’s goal of finding $1.6 million in FY2011. It also creates a study committee to examine further areas for improvement.

Steven Jeffrey, the Executive Director of the Vermont League of Cities and Towns, said the bill improves the way the law achieves the broad goals of the program.

“The current use program transfers almost $49 million in property taxes from enrolled landowners to other property and state General Fund taxpayers,” he said. “We owe it to those taxpayers to assure that the program is benefiting only those who believe in the long term goals of the program – to encourage and assist the maintenance of Vermont’s productive agricultural and forest land and to prevent the accelerated conversion of these lands to more intensive use. H. 485 restores a balanced land use change tax that better accomplishes the program’s goals,” Jeffrey said.

“For the last five or six years I’ve seen a gradual meltdown of the integrity of this program from a preservation standpoint to a tax avoidance standpoint,” said Tom Vickery, Appraiser for the Board of Listers of Stowe, Waterbury and Duxbury. “The principal cause of this change has been the watering down of the penalty. Members of the Vermont Assessors and Listers Association have also seen this change and have been raising a red flag due to it. The penalty change is needed to bring back the integrity of this program,” he said.

Tim Buskey of the Vermont Farm Bureau said his members will benefit from the legislation.

“The Current Use Program has helped to provide tax equity for farmers, foresters and landowners for many years,” said Buskey. “The Farm Bureau has worked hard to keep this program viable for the future. We ask Governor Douglas to allow the bill to become law. Our 3334 members – including farmers, foresters and landowners – will benefit from the changes H.485 makes to Current Use.”

Keith Thompson, a private consulting forester in Waterbury, says his clients who enroll in the current use program want stability.

“This bill brings stability to the program by resolving immediate budget shortfalls and providing a strong financial footing well into the future. For those ready to commit to good long-term land management, this bill continues to provide the opportunity to enroll in this important program. The easy out option is an important addition because it provides an option to those for whom the current use program only made financial sense under the previous penalty. Many of our clients are extremely happy that this is the bill that has come out of the legislative process; a bill that will promote a trusting, stable relationship between the State of Vermont and partnering landowners enrolled in the Current Use Program.”

Alison Clarkson (D-Woodstock) was one of several key lawmakers who ushered the legislation through the process.

“Our objective with H.485 was to strengthen Current Use by making it financially more sustainable for the future, putting muscle back into the penalty to prevent abuse, to maintain the integrity of one of Vermont’s most important conservation programs and to save $1.6 million for the FY11 budget,” Clarkson said.

VLCT and VALA said that the most critical provision in H.485 is the change in the Land Use Change Tax (LUCT), which is the penalty landowners pay when enrolled land is developed. Because of changes to the law made in the 1990s, the penalty was so weakened that landowners have begun to enroll land which they intend to develop. H.485 restores the penalty to where it was when Current Use was first enacted: 10% of the fair market value of the developed land.

Because this represents a significant change to the law, landowners will be given an opportunity to withdraw an entire parcel of land without penalty by September 1, 2010. In addition, if they want to withdraw just part of their land, they can do so by October 31, 2010, and fix the penalty at the old rate. Furthermore, existing current use law includes a hardship provision for farmers. If a farmer needs to dispose of land to keep a farm in operation, of if a farm operator passes away, there can be an abatement of the withdrawal penalty at any time. These provisions provide landowners ample flexibility to manage and maintain their farms and forests in the future.

In recent weeks, opponents of the bill have circulated figures claiming that the measure would result in a “1100 percent increase in the Land Use Change Tax,” or a revenue gain of up 9.4 million dollars. This claim has been discredited by the Legislature’s Joint Fiscal Office (JFO). In a memo to the House Committee on Ways and Means, a tax expert at the JFO said the methodology for claiming an 1100 percent increase “vastly exaggerates any impact the LUCT proposal will have on collections.”

In addition to VLCT, VALA and the Vermont Farm Bureau, Rural Vermont, Vermont Natural Resources Council, Audubon Vermont, Vermont Nature Conservancy and Vermont Land Trust have actively supported the legislation.

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Editor’s note: Five Democratic candidates for governor answered questions about conservation, the Current Use program and renewable energy as part of a gubernatorial candidates’ forum at the Environmental Action conference at Vermont Technical College in Randolph on Nov. 7, 2009. Eight to nine minute video clips follow of remarks by Shumlin, Sec. of State Deb Markowitz, Patrick Parenteau standing in for Sen. Doug Racine, former Sen. Matt Dunne, and Sen. Susan Bartlett. Lieutenant governor Brian Dubie, a Republican, was not present at the forum. The videos are in the order in which the candidates appeared.

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