CURRENT USE TAXATION STILL PRESERVING OPEN SPACE?
In 1968, our New Hampshire population was growing, our mostly rural state was giving way to poorly planned subdivisions and strip malls; land values were rising has never before, and increasing property taxes were forcing landowners to sell their lands. Our traditional industries of agriculture and forestry were threatened. A new public policy was sought to preserve our rural character in the face of these pressures.
For over 38 years, it has been possible for landowners to keep farms and forests undeveloped because the "Current Use" tax program lowered taxes on those properties. Almost 3 million acres, 60% of NH's taxable acreage, is in Current Use status.
Current Use is a tax relief strategy aimed at making it easier for landowners to keep their open space undeveloped. It works by taxing land at its value as a woodlot or farm instead of at its value as potential house sites. Current Use keeps property taxes at a lower, more predictable rate. 90% of current use landowners live in-state, and most current use landowners are in low-and middle-income families.
Current Use tax law has provided a good shortterm mechanism for preserving open space. But eventually, the Current Use Program loses its effectiveness. This is because most land that isn't already in current use has already been developed.
The next properties in line to be developed are the current use lands because they are all that is left. At that point, developers willingly pay a "use change penalty" when land that was once forest or field changes to residential, commercial or industrial. (Penalties typically recapture the taxes lost during the years that the land was in current use so that there is no net revenue loss to the community.)
In communities such as Farmington, sharply rising penalties indicate that Current Use lands are now the primary lands being converted to other uses. Because increases in the change use penalty indicate additional loss of open space, many towns have elected to direct a portion of the penalty to conservation funds, in order to invest in permanent protection strategies like acquisition. We cannot lose sight of the fact that land on which the penalties are paid are generally lost and irreplaceable. All we can hope for is that permanent protection of some other land will be funded in part by those penalties.
|
