Effect on Property Tax Values

The typical complaint about modifications to property tax policy is that a tax reduction for one person is often considered a tax increase for everyone else in town. The thought being that “the money must come from somewhere.” However, this is not actually the case under the Current Use policy established in Vermont. The state reimburses each municipality for every penny it loses from the reduced revenues caused by Current Use. Therefore, municipal property taxes do not rise as a result of this policy. Additionally, Current Use provides a source of revenue in the form of development fees. Whenever landowners leave the Current Use program they must pay a fine to the state. The money from the fine increases state revenue, which helps fund the state’s reimbursements to municipalities.

There are also studies that show how farmland typically cost municipalities very little money in terms of government services like public water and sewage. A study by the American Farmland Trust shows that residential development costs an average of $1.16 in government services for every $1.00 of economic benefit gained, compared to the agricultural land’s cost of $0.35 in services. Continuing to have these lands in agriculture and forestry practices can save municipalities many dollars of revenue because the extension of such services is not necessary. For more on the effect of land conservation on property taxes, see the resource section.