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Back in black / May 07, 2009
The issue of ag/forestal districts is back on the Board of Supervisors’ agenda, and it’s clear the votes are there to pass the policy with room to spare. I wrote a series of columns last year outlining why I think ag/forestal districts are a middling-to-bad idea, and nothing has changed since then to warrant a change of heart. That said, I do think county officials have come up with a reasonably thoughtful proposal, regardless of how misguided the notion may (or may not) be.

Since the last time this issue came up, the Board has developed some actual cost projections: J.T. Davis was kind enough to e-mail a spreadsheet yesterday that addresses how much tax revenue the county stands to lose by granting farmland owners a break on their property assessments. Bottom line: assuming that half of eligible landowners participate, the overall tax impact would be about $255,000 a year.

By way of comparison, each extra penny tacked on to the real estate tax rate generates about $367,000 in annual revenues for the county. So clearly we aren’t talking about a huge sum of money in the context of a $92 million county budget. Davis made that point repeatedly in a conversation we had yesterday, and it’s hard to disagree.

(And since I’m going to proceed to disagree with Davis on a lot else in the paragraphs to follow, let me just say that having him on the Board of Supervisors has been a huge plus for Halifax County. Davis performed a great public service by advocating on behalf of the Staunton River in the recent dust-up over downriver water flows from Smith Mountain Lake, and the fact that he has taken the lead in attempting to quantify the costs of ag/forestal districts should tell you something about the job he’s doing on the Board of Supervisors. People may not always agree on policy, but you can always respect the work a person puts into the process).

Okay. Disclaimers and qualifiers out of the way, let’s just state the obvious: If ag/forestal districts really are such a middling proposition, you have to wonder why anyone would bother to participate. After all, the application fee being bandied around is $500. According to Davis’ projections, the average annual tax savings to farmland owners would be $1.32 per acre. Even if small landowners are allowed to split up the application fee among themselves, it’ll take two years for most of them to recoup their up-front costs. After that time a typical landowner with 50 qualifying acres would save $66 a year. What’s more, for as long as the districts are in place, participants would give up their development rights. This doesn’t sound like a very compelling proposition to me.

Not to get all Woodward and Bernstein here, but I do think it behooves us to remember the admonition of Deep Throat and follow the money. There would seem to be two main classes of beneficiaries under the proposed policy. First is the category of people with fairly small tracts of land who (a) farm, (b) are stuck with well-above-average land assessments and (c) can work out an deal with their neighbors to combine tracts in order to meet the 200-acre threshold for creating a new district. Don’t know about you, but I would guess that’s a pretty limited group of landowners.

The second category of beneficiary is the large landowner with high-dollar property who can form a district all on his own. Just to cite the figures furnished by Davis, county farm/timber land is assessed at $1,300 an acre, on average. Under the existing proposal the county would assign a flat tax value of $1,000 to acreage within ag/forestal districts. If your tax assessment is already somewhere in that neighborhood — and according to county appraiser Harold Throckmorton, very large tracts valued at $1,000 or less an acre are pretty common in Halifax County — then there’s no real incentive to take part in the program. That leaves a target audience of the sort that at first blush wouldn’t seem compelled to sell off their land because they can’t pay the taxman.

But hey, what do I know. I could be totally off-base on the subject. Problem is, county officials don’t have any better sense of who would and wouldn’t benefit from ag districts, which means they really don’t have any idea if the program will achieve the stated goals of preserving farming and open spaces. For all their talk about the need to encourage the “right” kind of growth, one gets the impression that the supervisors are pushing a solution in search of a problem. After all, it’s not like development pressures are so severe in Halifax County that we’ll ever be mistaken for Fairfax County. And I don’t think the supervisors have really thought this issue through when they moan about the costs of extending services to newcomers buying up land in the countryside. In case no one else has noticed, Halifax County is losing population, not gaining. I would hate as much as anyone to see our wonderful scenic farms chopped up for trailer parks, but this notion that we need to restrain growth in Halifax County because we’re about to be overrun by Yankees or Quakers or aliens from outer space is laughable.

In the meantime, the supervisors recently enacted a budget for the coming year that required a $167,000 drawdown from the county’s cash reserves, that cut local funding for the schools by $330,000, and that would have been a heckuva lot worse had it not been for the fiscal deus ex machina known as the federal stimulus bill. Presumably the economy will recover by the time the supervisors are called upon to draft their next budget, but whether Halifax County is capable of meeting its long-term obligations even before this special tax break is granted is a question nobody seems to be in any hurry to answer. And we haven’t even mentioned the multi-million dollar hit to the school budget once Halifax County’s reversion benefit runs out. These are huge challenges that no one wants to talk about, especially not when the supes can hand out tax benefits like candy, but perhaps we should give the matter some thought.

Finally, regarding the argument that Halifax County needs to join the rest of the world in adopting land use taxation, I would simply note that in the past Halifax County never needed to differentiate among property owners because our tax rates were so low across-the-board that special treatment was beside the point. Land use taxation probably came too late to do much good in northern Virginia, which really does have a problem with vanishing open spaces, and advocates like to point out that neighboring Pittsylvania County has gotten ahead of the curve by putting its own system in place. Lost in that discussion, however, is the fact that Pittsylvania’s tax rate of 56 cents is a full dozen cents higher than our own. I wonder sometimes if the supervisors are eager to adopt this policy simply so the same dozen or so farmers who show up every year to gripe about taxes will stay home, thus giving the Board more of a comfort zone to raise rates on everyone else. If that’s the calculation, let me be the first to say it’s the wrong one.

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