a discussion of real-life tax revenue impact on ...• annually sets values for ad valorem tax...
TRANSCRIPT
The Conservation Use Value Assessment Program (CUVA)
and Forest Land Protections Act (FLPA):
A Discussion of Real-Life Tax Revenue
Impact on Agricultural Counties
Economic Factors Influence How Land Is Used
Tipping the Scales to
Encourage Land Conservation
In 1992, State enacts the
Conservation Use Valuation Assessment Program
(CUVA)
CUVA Program
• Provides a tax incentive for non-corporate landowners to:
• Ease development pressures
• Conserve open space
• Provide tax relief for “Bona Fide” agriculture and forestry uses• Provide tax relief for “Bona Fide” agriculture and forestry uses
• Lowers property taxes on agriculture and forestry land
• Reduces incentive to clear land in residential transition areas
• Protects vulnerable areas
• Property is assessed at 40% of current use value, reducing the tax
even more than an assessment at 40% of fair market value
How Does the CUVA Program Work?
• The Georgia Revenue Commission:
• Annually sets values for ad valorem tax purposes on conservation land
• Publishes rules and regulations to help county tax assessors determine the
values of property that qualify for conservation use assessmentvalues of property that qualify for conservation use assessment
• Landowners sign a 10-year covenant with the state to keep land in
current use less than 2,000 acres
• Minimum land areas are set by the Board of Commissioners
• Crawford County requires a 10-acre minimum, but exceptions are made to as
little as three acres
• Business, corporation, partnerships do not qualify
How is the Valuation Set?
• What are the “current use valuations”?
• Established by the Dept. of Revenue for the purpose of prescribing the
current use values for conservation use land
• The state is divided into nine Forest Land Protection Act Valuation Areas• The state is divided into nine Forest Land Protection Act Valuation Areas
• Taxation amounts emphasize current use valuation as opposed to
fair market valuation
• Savings of greater than 90% possible in high property tax counties
Taxation Amounts – CUVAVA/FLPAVA #5 Region
• Table of per-acre values: W1-580,
W2-536, W3-493, W4-452, W5-
409, W6-367, W7-323, W8-280,
W9-233, A1-641, A2-558, A3-519, W9-233, A1-641, A2-558, A3-519,
A4-475, A5-424, A6-361, A7-297,
A8-234, A9-172
What Does This Mean in Real Dollars for Crawford County?
2009 FMV 40% CUVA 40%
753 parcels
(75,034 acres)
$164,299,549 $65,719,820 $34,400,853 $13,760,341
$65,719,820 @ .02628 = $1,727,116
$13,760,341 @ .02628 = $ 361,621
DIFFERENCE: $1,365,495
There is no reimbursement from the state to assist the county with
the loss of tax revenues as a result of CUVA
Forest Land Protection Act (FLPA)
• Implemented after voter approval in the Nov. 2008 elections
• Increased the number of eligible landowners able to receive the • Increased the number of eligible landowners able to receive the
conservation tax benefit by removing acreage and ownership
restrictions
• Requires landowners to maintain their land in a qualified use for 15
years
How the FLPA Works• Eligible tracts must be used for subsistence or commercial production of trees,
timber, or other wood and wood fiber products – the value of any residences on the property are excluded
• Properties must be a minimum of 200.01 acres – unlike CUVA, there is no maximum acreage cap
• Properties must be a minimum of 200.01 acres – unlike CUVA, there is no maximum acreage cap
• Eligible landowners can be individuals or any entity registered to do business in Georgia and are not required to be U.S. citizens
• 2008 values are used to calculate tax amounts for the entire 15-year exemption
• State to reimburse counties half the lost revenues up to 3% of the digest; anything above that amount would be reimbursed at a rate of 100%
Impact to Crawford County in Year 1 (2009)
Using 2008 values as the baseline to calculate the impact on the tax digest
$6,714,603 @ .02628 = $176,459
2009 FMV 40% 2008 FMV 40% FLPAVA 40%
49 parcels
(22, 152 acres)
$21,841,039 $8,736,415 $17,612,115 $6,714,603 $8,141,712 $3,345,112
$6,714,603 @ .02628 = $176,459
$3,345,112 @ .02628 = $ 87,909
DIFFERENCE: $ 88,540
State’s reimbursement was only $36,578 net loss to Crawford County: $51, 962
Using current (2009) fair market values
$8,736,415 @ .02628 = $229,592
$3,345,112 @ .02628 = $ 87,909
DIFFERENCE: $ 141,683
State’s reimbursement was only $36,578 net loss to Crawford County: $105,105
Impact to Crawford County in Year 2 (2010)
Using 2008 values as the baseline to calculate the impact on the tax digest
$13,268,422 @ .02628 = $348,694
$ 6,155,466 @ .02628 = $161,765
2010 FMV 40% 2008 FMV 40% FLPAVA 40%
74 parcels
(40,324 acres)
43,539,619 $17,415,847 $33,996,677 13,268,422 $15,388,667 $6,155,467
$ 6,155,466 @ .02628 = $161,765
DIFFERENCE: $186,929
Anticipated State reimbursement: $46,539 net loss to Crawford County: $140,390
Using current (2009) fair market values
$17,415,847 @ .02628 = $457,688
$ 6,155,466 @ .02628 = $161,765
DIFFERENCE: $295,923
Anticipated State reimbursement: $46,539 net loss to Crawford County: $249,384
Long Term Impacts of FLPA
$200,000
$300,000 FLPA Revenue Loss
$-
$100,000
FY09 FY10
Cumulative Impact on Crawford County
Pre-FLPA Post-FLPA State
Reimbursement
Value Final Position Current
FMV Position
FY 2009 $176,459 $87,909 $36,578 ($51,962) ($105,105)
FY 2010 $348,694 $161,765 $46,539 ($140,390) ($249,384)
TAX EXEMPTION AMOUNT DUE TO CUVA (ANNUAL) $1,365,495
TAX EXEMPTION AMOUNT DUE TO FLPA (ANNUAL) $ 249,384
TOTAL EXEMPT FY10: $1,614,879
FY 2010 $348,694 $161,765 $46,539 ($140,390) ($249,384)
TOTALS ($192,352) ($354,489)
2010 Crawford County Acreage By Covenant(Crawford County Total Acreage = 205,570)
Existing Pending/Eligible
Acres Of
total
Acres Of total
total
Preferential 3,834 2% 3,834 2%
CUVA 75,034 37% 75,034 37%
FLPA 42,091 21% 73,496 36%
Total in
Conservation
120,570 59% 152,364 75%
2010 Conservation Acreage in Crawford County
Pending/Eligible FLPA Parcels31,405 acres
59% 75%
CUVA
FLPA
Pending/Eligible FLPA Parcels
Conclusion
• Land conservation cost Crawford
County a total $1.6 million a year,
amounting to 12.3% of the
county’s total budget$1,600,000
$1,650,000
Total Revenue Loss
county’s total budget
• In the last 10 years, the County
grew by 135 people
• Can rural Georgia continue to bear
the cost of land conservation?$1,350,000
$1,400,000
$1,450,000
$1,500,000
$1,550,000
FY09 FY10
