An Albemarle County program that grants a reduced tax assessment to property owners who use their land for agricultural purposes will remain unchanged. At their meeting on July 9, 2008, the Board of Supervisors declined to make any changes to land use taxation.
Staff had prepared a report
that explored the effects on County revenue and staff-time if land use taxation only applied to property that qualified as “open space” under state law.
The Board also voted 6-0 to further study a program to require landowners to reaffirm their property is being used for agricultural or forestry purposes. The County has never required a formal revalidation since implementing land use taxation was enacted in 1973. Staff will now prepare more information on what forms would be required as part of the revalidation process.
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proposed land use taxation change
was called “Option 2” after a
2001 Executive Summary
prepared the last time the Board considered changing the program. To qualify for the open space classifications, property owners would have to either put their land in an Agricultural-Forest District, put their land in permanent conservation easement, or agree to not to develop their land for a period up to ten years. The change would also have eliminated all land use taxation in the County’s development areas.
Mark Graham, the County’s Director of Community Development, told the Board that staff evaluated Option 2 by answering three questions. First, would the program be effective in protecting rural areas from development? Second, would the program affect property values and consequently County revenue? Third, how hard would it be to implement the changes?
Graham said the change would result in a rush of applications as landowners sought to qualify their property. Nearly 4,400 parcels of land currently in land use taxation are neither under conservation easement or within an Agricultural-Forest District.
Graham said Option 2 could be effective in protecting rural areas in the short-term, but only “marginally effective” in the long-term. Because Agricultural-Forest Districts need renewal after ten-years, landowners would have the option of subdividing their property before that took place without paying roll-back taxes.
Additionally, family subdivisions would still be allowed at any point. Graham said the County could experience a drop in property values if land owners decide to sell rather than take the steps to preserve their land use taxation.
“Some of the property owners may find it very difficult to be able to pay the property taxes at full assessed value,” Graham said. “If a lot of that property is put out onto the market, especially at a time like now where the market is really struggling with the inventories that it has, we are concerned it could affect the assessed value.”
On the question of the difficulty of implementation, Graham estimated that the County would need the equivalent of as many as 8 full-time employees in the first year to help process the paperwork. Going forward into the long-term, the renewal process for Agricultural-Forest Districts would also get more complicated as property owners sought to remove property before renewals, and that more would need to be created.
To summarize, Graham listed several reasons why staff recommended making no changes:
Before discussion, Supervisor Sally Thomas (Samuel Miller) read a statement disclosing that she owns property that is in land use taxation. Supervisor Ann Mallek (White Hall) also made a similar statement, but that her property is under conservation easement.
Supervisor David Slutzky (Rio) asked if it were true that most landowners who currently qualify for land use taxation would be able to remain in the program, providing they take the necessary administrative steps. “If we were to do this Option 2, we wouldn’t necessarily reduce the number of participants in land use tax at all,” Slutzky said.
But Thomas said landowners have to take their financial future into consideration, and would be hurt if they could not sell off their land in an emergency if they were in an Agricultural-Forest District. “It’s a guessing on their financial future sort of situation, not just simply jumping through more hoops,” Thomas said.
Slutzky said many growth area residents have contacted him to complain that the County is losing money because of land use taxation. “It sounds like staff is suggesting… that if we adopt Option 2, we’re not going to change our revenue picture from land use taxation revenue very much,” Slutzky said.
“That’s a very difficult kind of computation to try to guess at,” Supervisor
(Jack Jouett) said. That prompted Slutzky to ask why any change should be made, a question that sparked applause in the audience. The applause continued several times as Chairman Ken Boyd (Rivanna) asked his colleagues if they would support moving on from the debate. Dorrier said he was opposed to Option 2. Slutzky said he was not an enthusiastic supporter of Option 2, but did want to consider switching to a form of land use reform that would incorporate the transfer of development rights (TDR). The mention of TDRs prompted boos from the crowd, which prompted Boyd to warn the audience. Thomas said she was not in favor of Slutzky’s proposal because it might prevent landowners from gifting property to their family.
Rooker said that he did not support Option 2, but was glad that staff had performed a thorough analysis. He said he had also heard from growth area residents who also opposed the program.
“There is a significant component of the population that feels that they are paying 14 percent higher taxes to support other property owners,” Rooker said. “That is their view, and that is the perception… The people that are not in land use, a lot of them say you could eliminate land use and my taxes would go down 14 percent. There is a perception issue that needs to be dealt with.” Rooker suggested that the Farm Bureau undertake a public education campaign to explain the benefits of the program to the entire County. Thomas said a statement should be posted to the County’s website to explain the program. Mallek picked up that theme, and said people in County should think hard about what she called the ultimate goal of land use taxation.
“To me, in my mind, the goal of the program is to support the County value which makes us so different from Fairfax, and that is our agricultural community,” Mallek said. “Fifty years ago, Fairfax was just as rural as we are, and we’ll be like them if we’re not very careful.” She also said growth area residents should know that those who receive the land use taxation benefit pay the full assessed value on their house, as well as their personal property taxes on vehicles.
“I would like to see us stop trying to use the land use program as a growth management tool, and use it strictly for something we can defend to preserve the agricultural quality of life in our community,” she said.
The discussion then moved to whether the Board should institute a
that would require landowners to prove their land is being used for agricultural purposes. County Assessor Bruce Woodzell said that if that were required, he would seek to do it every two years.
“Revalidation would be a form that we would mail to all property owners under land use, and we would ask them to fill out the form and verify back to the office exactly what the property was being used for,” Woodzell said. He added that one advantage would be that it would help increase public confidence that the program was being used correctly. However, he said revalidation would require more paperwork from landowners.
“Failure to submit this form would be exactly like failure to reapply,” Woodzell said. “Which would mean the property would be disqualified from the program from the following tax year and would not be eligible until all proper forms would be filled out.” However, roll-back taxes would not be applied if this occurred.
Several surrounding counties currently have a revalidation process for their land use programs, including Augusta, Fluvanna, Nelson, Greene and Orange Counties. Woodzell said that Albemarle did not initiate revalidation because until last year, the County assessed property on a biennial basis. That meant that the County staff visited each parcel of land once every two years, and could perform a visual revalidation.
Woodzell recommended that if the Board undertakes revalidation, that it would be effective with FY2010. Notices would be sent to landowners in October 2008 informing them of the new requirement.
Slutzky asked Woodzell what landowners would need to do to prove that they qualified for land use taxation. Woodzell replied they could submit an IRS farm schedule, receipts, a forestry management plan, or a forestry commitment form. Slutzky said that when he owned property that was in land use taxation, he had a verbal agreement with a farmer who cut his fields for hay. Would that qualify? Woodzell said any such agreement would need to be put in writing.
Thomas said any confirmation form should be as easy to use as possible. Boyd encouraged Woodzell to get as much feedback from the Farm Bureau as possible. Staff will prepare some sample forms before the Board’s next work session on the matter. The Board voted 6-0 to move forward with the development of a revalidation plan, but the plan will need a formal public hearing before it can be adopted.
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