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Business Observer Thursday, Feb. 19, 2009 10 years ago

Conservation Overload

Governments, nonprofits and the tax code conspire with all too willing sellers to take land off the tax rolls even as tax revenues fall. A nasty byproduct: Buyers' remorse.
by: Jay Brady Government Editor

Governments, nonprofits and the tax code conspire with all too willing sellers to take land off the tax rolls even as tax revenues fall.

More than a third of the Gulf Coast is soon to be in public ownership or severely restricted by conservation easements. Charlotte and Sarasota counties will be at 40%. Collier, with nearly 650,000 acres of federally-owned land, will be two-thirds conservation.

So the natural questions arises: When is enough, enough?

After all, this is a time when every level of government seeks to improve its top line or face cutting expenses, thereby adding to rising unemployment numbers. But conservation land acquisition policies and programs of federal, state, regional and local government agencies, aided by a cadre of nonprofits, can be expected to result in more than a third of the Gulf Coast being part of publicly owned conservation lands.

And that's just conservation land, which doesn't include all the other recreation or other government-owned land.

Despite being already laden with more than 1.5 million acres of conservation lands, the eight Gulf Coast counties have the financial authority to acquire, and thus remove a projected 100,000-120,000 acres, not only from the tax rolls, but from the hands of the Internal Revenue Service. Plus, large landowners and owners of smaller but costly coastal properties are incentivized more than ever by revised federal tax rules put into effect in 2007.

Many sellers are conservation minded, but whatever their motives, sellers, if not already wealthy, would appear significantly enriched by taxpayers' largesse.

Already, $820 million in county property and sales taxes have been expended over the last two decades in the eight coastal counties from Pasco to Collier, leaving taxpayers with morning-after sticker shock.

Just these eight counties could spend at least another $680 million over the next 20 years, plus hundreds of millions more from the other sources if these programs survive the next waves of government budget cutting. State and federal programs often require a local match, often 50%, according to conservation program administrators and documents.

Taxpayers, of course, are footing the bill, and from all levels. First for acquiring the land, later for picking up the tab for land management plans, then for the land management itself and finally to make up for the revenue lost by taking the lands off the tax rolls.

Now, federal taxpayers will be bailing out federal, state and local governments with stimulus package funds.

Some area officials are beginning to look at the issue. For instance, Manatee County discontinued dedicating an “environmental millage” to conservation land acquisition earlier this year. And on a bigger scale, Florida legislators voted to suspend Florida Forever, the state's $300 million a year land acquisition program — a vote later vetoed by Gov. Charlie Crist despite expected future budget deficits that must be closed.

Raining revenue
A close look at conservation land acquisition programs in each of the eight Gulf Coast area counties reveals dozens of revenue sources raining down from Washington, Tallahassee, local governments, and private interests. These alphabet soup programs are the result of one-time, well-intentioned government programs now working at cross-purposes to the very same governments' extraordinary efforts to stimulate the national, state and local economies.

Florida Forever, the $300 million a year bellwether of conservation land purchase programs in the state and the successor to Preservation 2000, has spent more than $2.5 billion in just the last seven and a half years. A recent report states that another $589.3 million is needed based on encumbrances and anticipated contracts, bringing the cumulative total expenditures to more than $3.1 billion.

The Florida Forever funds will ultimately make their way down to area counties through the Florida Department of Environmental Protection and other state agencies. The $309 million purchase of Babcock Ranch in Charlotte and Lee Counties came through the DEP's Division of State Lands, for example.

In addition to some of the programs listed above, the Southwest Florida and South Florida Water Management Districts also funnels Florida Forever dollars to Gulf Coast county lands in large quantities. These two districts account for $508 million, or 18% of all Florida Forever funds and 60% of the available appropriation earmarked for the six districts statewide. That half-billion dollars in funding does not include another $50 million passing through the
South Florida Water Management District for the Everglades.

Florida Forever's priority list includes 14 projects throughout the Gulf Coast region — four in all or part of Collier, three in all or part of Charlotte, four in all or part of Lee, one in Pasco, two in all or part of Sarasota, and two in Manatee. Eight of the 14 are higher priority “Group A Projects.”

Nonprofit foundations are also adding more dollars to the conservation lands pot through assistance from the Land Trust Alliance, an association of 1,600 local and state land trusts. One nonprofit, the Sarasota Conservation Foundation, is promoting its “Campaign for the Future,” in which it claims to have raised more than $10 million to help fund the “protection of our bays, beaches and barrier islands.”

The SCF has also partnered with the Sarasota County Parks and Recreation Department to assist in “strategic purchases” for the county's Environmentally Sensitive Lands Protection Program and a new sibling, the Neighborhood Parkland Acquisition Program.

A tax break
Albert Joerger, the SCF's founder and president who is well known in Sarasota philanthropic circles, is an avid proponent of conservation easement donations. His support and success to date can in large measure be traced to the Pension Protection Act of 2006, which included a temporary federal tax code section — now due to expire at the end of this year — that treats the easements as charitable contributions.

A major component of the easement section is a provision allowing landowners to deduct the value of their donated easement up to 50% of their adjusted gross income over as many as 15 years. The previous tax law only allowed a 30% deduction and only for up to five years.

Congress reinstated the incentives last summer and they apply to donations made in 2008 and 2009. Joerger hopes the law will be extended again.

“It's been dramatic, the impact it's had,” Joerger says. “We have made our representatives aware that it's very beneficial to have those laws. We feel it's very important.”

At one point, conservation land purchase programs in the Gulf Coast region — put in place through citizen referenda fostered by avid environmentalists — were thought to be important, too. In a recent Sarasota County survey, for instance, respondents said parks would be the second service area they would recommend to go through a reduction, second only to “none.”

And housing-related costs were the top choice for what is putting the biggest pressure on an individual's finances. The responses partially support the conclusion: Taxpayers may have had enough, at least for now.

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