Land protection has increased in recent decades parallel with development pressures. Town leaders struggling to balance budgets and to provide services often resist conservation because of perceived impacts on local property taxes. Their reasoning is based on the fact that protected land is unavailable for development, and thus worth less in the current system of owning, valuing, and taxing land. In addition, protected land may be owned by tax-exempt entities such as nonprofit organizations.
Researchers from Harvard Forest, Amherst College, and Highstead analyzed data on land protection, valuation, and tax rates from 1,436 towns and cities in Connecticut, Massachusetts, Vermont, New Hampshire, and Maine between 1990 and 2015. They found that, for the majority of towns and cities, new land protection did not substantially raise tax rates or impact towns’ ability to provide public services.
For every 100 acres of new land protection in the Northeast, the average homeowner’s annual property tax bill increased by $1.16 per $100,000 of value. Impacts on taxes were greater, although still relatively small (up to $10 per $100,000), in communities with certain characteristics:
- A very high share of conserved land (greater than 34 percent town land area) where new land was protected by state or federal governments with insufficient funding from mechanisms such as payments-in-lieu-of-taxes.
- Mostly year-round residents. Vacation or seasonal home owners tend to use fewer local services and often live in locations where property is valued higher.
- Lower average household incomes. Less ability to pay for housing limits increases in property values and the ability of towns to absorb changes in tax revenue.
- Slowly growing tax bases, although the researchers noted that “tax-base growth by itself is consistently associated with an increase in the property tax rate.” This is likely the case, the authors noted, because growing tax bases are associated with new development, which also brings higher costs for new municipal services.
- Less land enrolled in current use taxation programs that allow reduced taxes for agriculture and forestry.
These results, published this year in the Journal of Environmental Economics and Management, highlight disparities in the impacts of land protection, which tends to disproportionately impact taxes in the towns least able to afford it, yet benefits surrounding communities by supporting area wildlife, protecting air and water quality, and providing access to the outdoors. The researchers propose that these broader public benefits be recognized. “State and federal agencies can ensure that payments-in-lieu-of-taxes programs are fully funded,” they wrote, “and are large enough to provide real compensation for the value that these protected lands provide.”