Current Use Legislation May Face Veto

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(Host) In the last hours of the legislative session, lawmakers approved changes to a tax program that’s designed to keep land in farming and forestry.

The changes in the Current Use program are intended to put it on a solid financial footing

But the bill faces a possible veto from Governor Jim Douglas. He says it will result in major tax increases for landowners who withdraw their property.

VPR’s John Dillon reports:

(Dillon) Under Current Use, property is assessed on how it is used – such as growing trees or grazing cows – instead of its higher, development value.

The 30-year old program is popular with landowners. About 2 million acres are enrolled, and it’s widely credited with helping to protect Vermont’s working landscape.

But lawmakers wanted to save $1.6 million in program costs. So they put in a one-time fee of $128 for land owners who are enrolled. And they changed how the penalties are assessed if land is taken out of the program for development.

But the Douglas administration says the changes could amount to large tax increase on landowners. Jason Gibbs is commissioner of Forest and Parks.

(Gibbs) "We really think that the proposed changes are bad for the program, bad for the program participants and bad all around policy. The Legislature took what they said was a $1.6 million budgetary policy and converted it into an $11 million tax increase."

(Dillon) The provision that Gibbs objects to increases costs to landowners if they pull small parcels out of the program.

The changes in the penalties are designed to discourage people from parking land in Current Use – gaining the benefits for a few years – and then pulling land out for development.

A coalition of environmental groups supported the changes. Jamey Fidel is with the Vermont Natural Resources Council. He says the current penalties are too low.

(Fidel) "It’s somewhat of a joke right now. It’s not an effective disincentive for short term enrollment. And the new land use change tax will put the break even point where landowners will receive enough benefits from the program to outweigh the land use tax at about six or seven years. And we think that’s a fair approach on the land use change tax."

(Dillon) Fidel says it will be unfortunate if Douglas vetoes the bill.

(Fidel) "I certainly don’t think this is a death knell to the working landscape and it doesn’t overly crimp landowners’ abilities to take some time to decide whether they need to withdraw some land or whether they’re in for long-term conservation, and that’s really what the land use change tax is supposed to accomplish.."

(Dillon) But Gibbs said the governor strongly objects to the provisions.

(Gibbs) "Whether or not this becomes law will be Gov. Douglas’ decision. But I think we all know how the governor feels about tax increases. Our objections have been made publicly to the Legislature, and we’ll let those objections stand."

(Dillon) If the governor does veto the bill, the Legislature has reserved June 9th as the date for a special veto session.

For VPR News, I’m John Dillon in Montpelier.

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