A county property tax credit might entice more landowners to preserve farmland and open space, two land preservation advocates told Carroll County commissioners yesterday.
Bradley D. Butt, president of the Carroll County Land Trust, recommended that the county offer a 15-year property tax credit to landowners who donate to the trust the development rights to their land.
The state has offered a similar tax credit since 1986 to landowners who donate their development rights, known as easements, to the Maryland Environmental Trust, said William Powel, administrator of the county's Agricultural Land Preservation Program.
"A tax credit isn't the main reason someone donates land," he said. "The motivation is the desire of the landowner to see the land preserved."
The state offers a credit only on the portion of the property that is not improved by houses or other buildings. Mr. Butt and other Carroll land trust directors recommended that the county offer the credit on the entire property.
The General Assembly passed legislation in 1991 that gives counties authority to offer property tax credits for easement donations.
The Internal Revenue Service considers an easement donation to be a charitable contribution, Mr. Powel said.
Offering a tax credit would cost the county less per acre than what it pays to preserve farmland through the state farmland preservation program, he said.
The county usually pays 40 percent of the cost to preserve farms through the state preservation program. This year, the Maryland Board of Public Works voted to pay $1,533 per acre to preserve 717 acres of farmland in Carroll.
If the county had offered a 15-year tax credit on those properties, Mr. Powel estimated, it would have cost the county $162 per acre.
A tax credit program could not replace the state Agricultural Preservation Program, in which the state pays farmers for their development rights, because fewer people donate rights than sell them, Mr. Powel said.
Many people who sell easements to the state do so because they have a lot of debt and need the money to keep the farm, Mr. Butt said. People who donate easements want to preserve their land, he said.
The Carroll County Land Trust and Maryland Environmental Trust also protect woodland, wetlands and natural and historic areas from development.
Five Carroll landowners have donated 394 acres to the Maryland trust; the most recent donation was in 1991. The Carroll trust was formed in 1993.
Three property owners are considering donating 246 acres to the Carroll County Land Trust or to the Maryland Environmental Trust, Mr. Powel said. He did not want to release their names.
If those landowners did not have to pay the county property tax of $2.35 per $100 of assessed valuation on the 246 acres, Mr. Powel estimated, the county would lose $4,736 a year, or $71,049 in 15 years.
Mr. Powel acknowledged that offering tax credits would cost the county. "A tax credit is just as serious as an expenditure. It's the same thing," he said.
Commissioner W. Benjamin Brown suggested that the tax credit be given only on donations of farmland, because the county's goal is to preserve farmland.
Carroll County has preserved about 22,000 acres of farmland, leading the state in the preservation of such land and ranking third in the nation among counties.
Mr. Brown asked Mr. Powel for more information about how a tax credit program would affect the county and how many landowners would be likely to apply.