Part 2 of 2
Originally Printed in the Register-Star
by Peter Paden
Last month, prompted by news of a significant federal legislative proposal to broaden the tax benefits for land conservation, I described the primary financial incentives created by federal and state law to encourage owners of property with high conservation value to protect it. I also noted that it is the season when property tax assessments are published, grievances may be pursued, and all of us are thinking about the fairness or unfairness of the system. In this context, one sometimes hears grumblings about how conservation takes property off the tax rolls or otherwise unfairly shifts the tax burden. So in addition to clarifying the real tax benefits that exist to encourage conservation, it seems a good time to address a number of myths and misconceptions in fairly wide circulation suggesting that conservation imposes a negative drain on the public treasury.
Myths and Half-Truths about Conservation and Taxes
There is a tremendous amount of misinformation about the tax impact of conservation activities.
One of the most common is the belief that land subject to conservation easement is tax exempt; that a landowner, by choosing to protect the conservation values of his or her land (people often loosely refer to this as “putting their land into the conservancy”), is taking that land off the tax rolls.
It’s not true. People who create a conservation easement retain ownership of the land. They can occupy it, lease it, sell it, and use it for anything except activities specifically prohibited by the easement terms. It is private property. As such it is subject to the State’s property tax provisions.
In some circumstances, depending on specific facts, the property owner might have an argument that the assessment should be reduced because of the easement. The law on this score is complex. As a practical matter, however, local tax assessors in New York enjoy a great deal of independence. We are not aware of any Columbia County assessors who make it a practice to lower assessed values because an easement has been created. On the contrary, it is our sense that a majority of owners of our easement properties pay the same taxes they’d be paying if the land were not conserved. If an easement land owner has made a showing that a reduced assessment is warranted, they are simply obtaining tax relief to which they are entitled under established rules.
A second complaint we often hear is that CLC owns a lot of property and doesn’t pay taxes on it. The statement may be directed to one of several different sets of facts. In many cases, it reflects the misapprehension that CLC owns all 21,500 acres of land on which we hold conservation easements. As discussed above we don’t, and the owners of that land are paying property taxes.
CLC does, however, own some land. We own more than a thousand acres in several parcels that we hold for public access and enjoyment and for wildlife habitat and resource conservation. Our Public Conservation Areas (PCAs) are open free of charge, dawn to dusk, 365 days a year to everyone for hiking, bird watching, fishing, snowshoeing or any other form of passive recreation, and they are well used. They are an important part of our mission.
As a 501(c)(3) not-for-profit corporation, CLC is exempt from paying property taxes. It is our policy, however, to make payments-in-lieu-of-taxes (PILOT payments) on our PCA properties to the Towns in which they are located and to contribute as well to the local fire and rescue squads.
We do not make PILOT payment to local school districts. We support the education of our County’s youth in another way. We operate an extensive program of education on the environment and the natural world. More than half of the participants, well over a thousand people every year, are Columbia County school children. Our educator, who holds a Masters Degree in Environmental Education, tailors the programs to comply with state-mandated curriculum requirements. We are thus supplementing our schools’ curriculum with important programs they would otherwise be unable to provide. The funds to pay for this come out of our general operating budget. CLC thus makes a significant contribution to the education of Columbia County school children on a regular basis.
People sometimes have a much broader idea in mind when they complain that conservation is a drag on the local economy. Part of it, to be sure, has to do with the erroneous perception of taking land off the tax rolls. But beyond that, there is a perception in some quarters that conservation comes with a large opportunity cost. The concern is that conserved land will never be developed to its full potential, and the community will be deprived of the tax revenues and other economic stimuli that are supposed to follow.
Study after study has shown, however, that the cost of residential development in increased municipal services commonly exceeds the income generated from increased property taxes. In one recent study, it was estimated that for every dollar of tax revenue generated by a residential development, the municipality paid out something like $1.30 in extra expenses. By contrast, for every dollar of revenue generated from a working farm, the municipality paid out $.37. A similar ratio would be expected if, instead of a working farm, the comparison was made with large properties with little or no development on them.
The argument that conservation cuts into public revenues also overlooks the fact that conserved land and publicly accessible open space add significantly to a community’s quality of life and increase its attractiveness to others as a place to live, work, visit or establish a business. This phenomenon has also been shown to be real. A major employer that relocated to Saratoga recently was motivated to do so in significant part because of the area’s exceptional public trail system and highly attractive open spaces.
We are proud of our work at the Columbia Land Conservancy, not only because we believe in the importance of conservation to the land and the environment, but also because we believe that successful conservation here will contribute directly and substantially to the strength of our local economy and the health of our communities. I would argue that Columbia County’s single most significant natural asset is the truly exceptional conservation resources – excellent farmland, huge forest tracts, extensive wildlife habitat and water bodies and extraordinarily scenic open spaces. Our economic future will be directly tied to our collective commitment to take good care of these valuable but fragile assets.
• Peter Paden is Executive Director of CLC. His column appears on the first Thursday/Friday of every month.