Spend to save

first_imgBy Jeffrey DorfmanUniversity of GeorgiaGeorgia is experiencing a budget shortfall that will force cuts of between 5 percent and 10 percent of the state budget. The governor and the General Assembly must consider any opportunity to reduce spending. Cuts of that magnitude won’t be easy to make. Hopefully, the Georgia Land Conservation Program won’t be among the cuts.Most federal and state government programs today are transfer programs. That means they take money from one group and give it to another. Examples include Medicare, Medicaid, economic development subsidies and Social Security. Land preservation is a transfer program because the money comes from sources that may not directly benefit from the preserved land. For example, if Joe Georgian’s tax money is used to preserve privately-owned farmland or a park in an area he’ll likely never visit, Joe may not see a direct benefit. Transfer programs can be unpopular with those on the taking end of the deal.Give and getSome transfer programs are still a good financial deal for taxpayers. For example, health and nutrition programs for pregnant women save taxpayers money because it’s cheaper to provide prenatal care than bear the higher costs associated with low-weight or premature births. In many cases, land preservation programs fall in this category. When farmland is preserved and kept in agricultural or timber production, taxpayers may have a lower total tax bill.If the land is sold to a developer and houses are built on the land, it’s likely that the taxes paid by the new homeowners will be less than the cost of providing services to the new residents. Research strongly supports this. Unless the houses are expensive, between $200,000 and $300,000 in most parts of the state, or the residents have few kids who attend public school, taxpayers probably pay less to preserve the land in one time costs and in annual property tax breaks than they would pay to make up the budget shortfall caused by their new neighbors.When parkland or natural lands are preserved, similar economic scenarios play out. Even better, if the parkland or nature areas are surrounded by development, the surrounding property values rise. Thus, those nearest to the preserved land pay more property taxes, potentially helping to offset some of the cost of the land preservation. Under the Georgia Land Conservation Program local governments must put up some of the money, so these increased property taxes reduce the transfer program nature of the land preservation program even further.Environmental benefitsPreserved land (whether farm, park, timber or just natural) provides environmental amenities. We get cleaner water, cleaner air and stormwater management. While a cleaner environment is likely something most of us value, these environmental benefits are also attractive to our wallets. Rather than having to build government facilities to accomplish these tasks, we get them for free from the preserved land, its soil and plant life. In suburban settings, an acre of trees (such as a wooded, pocket park) can save the local government $1,000 per year in avoided costs. That is, taxpayers don’t have to pay to build stormwater collection or water treatment facilities. These costs are easily overlooked since they’re saved by not appearing in the budget, but taxpayers still should be happy about them.Land preservation programs cost money, both in one time payments such as through the Georgia Land Conservation Program and in annual tax breaks such as the Conservation Use Assessment. In exchange, most Georgians realize they receive the non-monetary benefits of saving these lands, enjoying them and gaining environmental benefits. Few people realize that we usually get some or all of the money spent on land preservation back through lower future taxes due to the land remaining undeveloped. With both the environmental and economic upsides in mind, I hope we preserve and even expand funding for the Georgia Land Conservation Program during these tough budget times.My work on this in Georgia and other programs can be found at the Web site (Jeffrey Dorfman is an economist with the University of Georgia College of Agricultural and Environmental Sciences.)last_img

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