January 5, 2015

Conservation easements and taxes

I present this information so each taxpayer can decide if the “preservation of open land” is what they want done with their money.

According to the Piedmont Environmental Council, 96,606 acres (23%) of the county is covered by conservation easements. These easements often result in a significant financial benefit to the recipient.

Since 2002, a few landowners (less than 50) have been paid a total of $14.2M for the development rights on 10,409 acres of land they own. About $9.7M of that money came out of the pockets of county taxpayers.

The 2014 Fauquier County Farm Product Directory lists 22,312 acres as being used to grow field crops, grain, hay, straw, grapes and vegetables. That amounts to 5.38% of total county acreage. The Directory also lists live stock farms as containing 6,971 cattle, 2,428 dairy cows, 936 horses, 640 sheep & goats and 474 hogs.

The 2013 county people population was about 67,300. The 2000 Census listed 375 people working at farming, fishing, or forestry occupations, which amounted to 1.3% of the population at the time.

To gain some understanding of taxpayer financial impact, I used the hypothetical case of a person who owns 200 acres of farm land that is assessed at $1,500/acre ($300,000). That person would pay $3,000 per year in Property Taxes. If they put 10 building lots (150 acres) into the PDR program, they would receive a one-time payment of $250,000, $170,000 of which would be paid by county taxpayers. They would also receive a tax deferment of $1,100/acre.

The deferred 150 acres would be assessed at $400/acre for future tax purposes, resulting in taxes going from $3,000 to $1,350, an annually-recurring benefit of $1,650.

If one then assumes that the owners of the 10,409 acres now in the PDR program received the $1,100/acre reduction, that would amount to a total annual tax reduction of $11.5M. To put that in perspective, the source of revenue from all Real Property Taxes in 2013 was $90M.

Whether you agree or disagree with how your tax money is being distributed, you should share your opinion with your representative on the Board of Supervisors. It’s your money, you should have a say on how it’s spent.

Rex A. Hoover