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Bills target working lands for economic development assistance

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2012-04-01

The following article was published in the April/May 2012 Vermont Property Owners Report. (Reproduced here with permission)

It has become common for states, including Vermont, to compete for jobs and economic development by offering potential employers packages of government-provided assistance. But this year legislators here are pushing to bring the effort full-circle by providing similar, structured assistance to Vermont’s original employment and economic resource: the land.

In February, the Senate and House Agriculture Committees passed similar, though not identical, “working lands” bills (H.496 and S.246), both by unanimous votes. However, it remains to be seen whether the Legislature will be able to find funding for the bills.

The goal of the legislation, as described in a summary drafted by the Vermont Council on Rural Development, is “to stimulate a concerted economic development effort on behalf of Vermont’s agriculture and forest products sectors by systematically advancing entrepreneurism, business development, and job creation.”

If one or the other bill is passed, the state would provide grants and loans, technical support, and aid for building up the infrastructure that supports the state’s farming and forestry sectors, helping to preserve the rural character of Vermont.

To accomplish this, the House bill would create a $2.2 million Vermont Working Lands Enterprise Fund, to be managed and directed by a Working Lands Enterprise Board. The Senate bill proposes to spend a smaller amount, $1.6 million. Supporters hope for substantially higher funding levels in future years.

Finding funding this year could be tough, though. The House Appropriations Committee says it wants to provide at least some of the money asked for in the House bill, but the Shumlin administration is opposed to starting new funding initiatives during a time of fiscal restraint.

Advocates of the bill point out that Vermonters are already engaged in land-based enterprises that are part of our state’s culture, and figure to be increasingly so. They cite Vermont’s leadership in the local-foods movement as well as organic farming, the explosion in recent years of farmers’ markets and farms that sell directly to member-customers, widespread use of conservation easements, and the widely recognized importance of the undeveloped but productive landscape to tourism and Vermont’s “brand.”

“There’s a lot of energy coming out of the entrepreneurial sector that we need to harness,” says Kate McCarthy, sustainable communities program director for the Vermont Natural Resources Council (VNRC). “Supporting those entrepreneurs is what this is all about.” One legislator reportedly called the bill the “jobs bill of the year.” Amy Shollenberger’s lobbying and consulting firm, Action Circles, is promoting the bills on behalf of the Vermont Working Landscape Partnership.

“If we want the state to be economically strong and resilient, we need to support the businesses that keep the land in production,” Shollenberger says. Businesses tied to farm and forest production don’t fit the standard model, she adds. “Financing is really different for land-based businesses. And technical assistance is difficult.”

One focus of the bills is to provide a lift to the state’s forestry industries. Vermont Woodlands Association president Put Blodgett discussed the sector’s challenges in the March 2012 issue of the association’s newsletter, where he noted that he often sees trailer truck after trailer truck with the best logs from Vermont and New England heading north to Canada. “Right here in central Vermont we grow the best sugar maple in the world,” he wrote. “And most of it is exported! … Exporting our logs and lumber provides jobs elsewhere. Somehow we have to make the economics work to keep those jobs here. Hopefully, the working landscape effort will provide some answers.”

As originally conceived, the bills were even more ambitious; among their provisions was creating “working lands designation” areas for targeting public investments and special tax changes designed to help owners of large land parcels. These were eliminated from the bills that won committee approval in February.

One of the two proposed tax changes that was dropped would have altered the estate tax so that lands designated as “working lands” might be assessed for estate tax purposes, in certain circumstances, at the value established by the state’s current use program. The other would have sharply reduced the state capital gains tax on products from working lands by creating an 80% exemption.

Vermont Property Owners Report is a subscription newsletter about Vermont and Vermont real estate based in Montpelier. For more information, call (802) 229-2433 or go to: www.vermontrealestatetoday.com