Bonds favored to save farmland

State needs to preserve more as boomers retire, state senator says

October 11, 2007|By Rona Kobell | Rona Kobell,SUN REPORTER

A leading legislator said yesterday that the state should consider selling revenue bonds to raise money to preserve farmland as open space -- a growing need, he said, as baby-boomer farmers retire.

State Sen. Thomas M. Middleton, a Charles County farmer and chairman of the Senate Finance Committee, said many of the farmers he knows will be retiring in the next five to 10 years, and their children don't want to be farmers. To keep that land from becoming housing developments, Middleton said, the state needs to make sure it has a large enough pot of money to compete with developers.

"If there is a peak [in available land], will we have the funds to buy it?" Middleton said. "Because once it's gone, it's gone forever. And if it's going to be gone forever, I would not be opposed to putting in a bond. I think it would be a very worthwhile pursuit."

Middleton spoke yesterday at a hearing before the General Assembly's joint subcommittee on land preservation, which he co-chairs. He asked the panel's staff to research how many farmers are of an age where retirement is looming and to find out what they are planning to do with their property.

The senator's interest in selling revenue bonds comes at a time when the state Open Space program -- which can be used to preserve farmland -- is fully funded. It has $258 million for fiscal year 2008, far more than it had in 2005, when then-Gov. Robert L. Ehrlich Jr. took money from the fund to balance the state budget.

The program, which was set up in 1969, is funded through a percentage of the real estate transfer tax. About $44 million of the money will fund the Maryland Agricultural Land Preservation Foundation, which pays farmers to keep their land in agricultural production rather than to develop it.

Middleton said he thinks the state might need more money. He suggested that Maryland possibly could sell revenue bonds to raise more money to protect large parcels of land -- and then use funds from the open space program to pay off the bonds over time.

There has been a significant increase in the number of farmers asking the state for money to preserve their land. Three years ago, the Agricultural Land Preservation program had 100 applicants. This year, it had 450, said Douglas Wilson, director of administration for the Maryland Department of Agriculture.

Wilson said he shares Middleton's concerns that the program will not be able to keep up with demand, especially because the downturn in the real-estate market means less money from the transfer tax for land preservation.

"Just when we get the program geared up again, the real estate market turns on a dime," Wilson said.

Maryland's open space program has long been considered a model for land preservation, in part because of the use of the transfer tax to pay for it. When development pressure is high, the money coming into the fund grows. But when the market slows, so does the money coming in.

Because of that fluctuation, legislators and state officials have previously discussed using revenue bonds to generate more money for the program. It never happened, Middleton said, because "there's been a feeling that we had enough money" for land preservation.

But he said he doesn't have that feeling anymore. Middleton said he might introduce a bond bill in the session that begins in January -- but only if the research confirms his gut feelings.

"It would be a significant change in policy," he said of the potential legislation. "I don't see a likelihood of it getting passed unless you have the information that this land is getting scarcer and scarcer."

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