The Virginia Joint Legislative Audit and Review Commission released a report in September that analyzed the state’s conservation easement programs, and suggested possible sources for dedicated revenue to reliably fund those programs.
The report, mandated by the Virginia General Assembly, concluded that the state’s Land Preservation Tax Credit program encourages the conservation of total acreage over priority lands, and encouraged the state to adopt a more balanced approach that emphasizes the funding of grant programs.
“There’s less control where the credits [and therefore easements] go in a tax credit program,” JLARC principal legislative analyst and the study’s project lead Jamie Bitz said. “But you have more control over where funding goes in a grant program because that program will have more specific goals.”
“The LPTC works well in that it provides access to a wide variety of land,” Bitz added, “but because the state caps the total amount of allowable tax credits in a given year, and because this program is on a first come, first served basis, there’s no guarantee that tax credits go to the highest priority land.”
But many in the conservation community find the definition of priority land to be subjective.
“Each group you ask is going to have their own priorities,” said Piedmont Environmental Council land conservation officer Rex Linville. “The tax credit program has done a really good job of protecting a broad range of priorities, rather than a set of priorities that is handed down from on high.”
“Where we disagree with the report is on the critique of the LPTC not protecting priority land,” Linville said. “But where we do agree is that we need more dedicated revenue sources for our grant and bond programs.”
Of additional concern to the conservation community is where JLARC suggests finding those revenues. While the report provides seven options, one includes lowering LPTC’s cap, which is currently set at $100 million, and redistributing the difference to grant programs.
Linville would prefer to see LPTC funds remain untouched.
“We need more dedicated revenue sources for grant programs,” Linville said, “but that should not come at the expense of the LPTC. We need to make the pie bigger, as opposed to splitting the pie into smaller pieces.”
To increase the size of the “pie,” conservation leaders highlighted as viable options the sale of bonds, dedicating a state recordation tax to conservation funds, and a water utility fee. The first two were also mentioned in JLARC’s report.
Bitz said the study provides a variety of options for generating dedicated revenue and takes economic constraints into account.
“We looked at the impacts these options might have on taxpayers and how they would generate additional revenue,” Bitz said. “Redirecting funds from the LPTC doesn’t raise taxes.”
“But you really need a variety of financial tools and programs for a strong conservation program,” Bitz added. “You need grants, land acquisitions and tax credits.”
In Albemarle, Acquisition of Conservation Easements coordinator Ches Goodall understands the importance of “dedicated” revenue streams, and he also recognizes that financial incentives attract landowners to conservation.
“It’s the best game in town,” Goodall said, “but we need to be funded to maintain our viability so people know that we’re still around.”
The county established ACE to provide a financial incentive for family farmers and lower-income landowners to place their land into conservation easement.
ACE differs from the state’s LPTC program in that ACE pays cash directly to landowners, whereas the LPTC offers tax credits.
“Deductions are great for the wealthy landowner,” Goodall said, “but the family farmer who doesn’t make much money wouldn’t get anything for donating an easement, even though both properties are valuable for conservation.”
To date, ACE has placed almost 8,000 acres and approximately 40 properties into conservation easement, but like many land acquisition programs at the state level, ACE has seen its budget decline from almost $1.7 million in 2007 to approximately $178,000 this past July.
Albemarle Supervisor Dennis S. Rooker said that while the ACE program’s budget has tightened, it still serves a useful purpose.
“The ACE program has suffered some loss financially as we’ve had to deal with more stringent circumstances,” Rooker said. “But it’s a popular program, and the citizens generally understand the significance of protecting important property in perpetuity.”
“And because of the sliding pay scale that is based on a landowner’s income,” Rooker added, “it doesn’t compete with the tax-credit programs that some of the larger conservation groups use.”
With respect to ACE’s current viability, Goodall says that the program is getting by.
“Our current budget is enough for about one property per year, maybe two if we can get a matching funds grant,” Goodall said. “As long as we can buy one or two properties a year, we’ll be viable, but it’s the minimum right now.”
