ADDISON COUNTY — Changes to the so-called “Current Use” program were still being debated at 11 p.m. last Wednesday night as lawmakers worked furiously toward adjournment, and the bill that slipped through in the final hours of the day was among the last OK’d before the General Assembly dispersed.
Now, the contentious changes to the Use Value Appraisal Program, as Current Use is formally known, face the threat of a veto from Gov. James Douglas, who has expressed concern about the higher penalties the changes would place on landowners who wish to withdraw land from the popular tax abatement program.
“The governor has not made up his mind on how he’ll act on the bill,” said David Coriell, a spokesman for Douglas. “He does have some misgivings about the changes in the Current Use program.”
Current Use rewards landowners with lower taxes for keeping working farm- or forestland free from development. Land in the 32-year-old program is taxed at the value of what it is currently being used for, instead of at the higher value it would have if it were developed. The state reimburses individual towns for the tax revenue they lose because of the program. Right now, reimbursements total roughly $11 million each year.
In an effort to trim $1.6 million from the budget, lawmakers OK’d a $128 “per participant” fee for every landowner enrolled in Current Use. Lawmakers also hiked up the penalties for landowners who withdraw land from the program for development, though a last-minute change to the legislation would give landowners until Sept. 1 to withdraw their entire parcel under the old land use change tax.
Changes to Current Use were among the several agricultural initiatives that made their way through the House and Senate this legislative session. The themes that emerged from the agricultural legislation this year stressed the ties between economic development and agriculture, the importance of trimming costs, and the humane treatment of animals (see companion story).
A proposed one-year moratorium on new enrollments in the Current Use program was left on the cutting room floor as legislators brainstormed ways to save money in the popular, but expensive, program. (The moratorium was included in an early House version of the Current Use bill, but not the Senate version.) Though the Sept. 1 “easy out” was added to the legislation just days before adjournment, it was among one of many proposals included in the legislation that were suggested last fall by a study group devoted to reforming Current Use.
A majority of lawmakers in both the House and Senate ended up supporting the higher penalties, which many feel correct a flaw in the current version of the program: Now, penalties are insufficient to discourage landowners from just temporarily enrolling land in the program, reaping the tax benefits, and then turning around and developing their parcel.
The proposed penalties would actually revert to the original intent of the 32-year-old Current Use program, said Sen. Claire Ayer, D-Weybridge. Currently, the penalty is so low for withdrawing land from Current Use for development that a landowner, on average, saves enough money in taxes to “break even” on the penalty after just 290 days in the program.
Gov. Douglas has five days from when the bill reaches his desk — not from when it is passed — to act on it (sign it, veto it, or let it go into effect without his signature). It can take between a couple days to a couple weeks for the bill to be delivered.
Ayer said she can’t speak to whether or not the governor will veto the bill, but expressed confidence in the changes.
“The program is probably the best idea Vermont ever had,” Ayer said. “If it’s vetoed by the governor, I think it would be a big mistake. It (would) destabilize the entire program.”
Reporter Kathryn Flagg is at [email protected].