Farmland Use-Value Assessment Preventing Restoration of Wetlands?

Farmland Use-Value Assessment Preventing Restoration of Wetlands?

By: Derek Strohl

A well-meant tax policy is costing Wisconsin thousands of acres of potential restored wetlands. The policy, known as use-value assessment, allows agricultural lands to be assessed at their agricultural value instead of the market value. The premise is that taxing farmers according to the use-value will result in lower taxes, making it easier for farmers to keep their land and to keep their land in farming. This policy appears to be working well at alleviating the tax burden on agricultural lands. Some agricultural lands are projected, under the current tax formula, to have negative taxes in 2004!

However, since a given township’s total tax revenue is dictated from the state level, the taxes on wetlands have increased with the implementation of this policy. Wetland owners are claiming that their taxes are increasing as much as 30-50 times their previous rate due to this policy. Agricultural land that is enrolled in the Conservation Reserve Program (CRP), which involves, among other things, installing vegetated buffer strips and restoring wetlands, can be taxed at the use-value rate. But land that is enrolled in the Wetland Reserve Program (WRP), the federal government’s premier program for converting agricultural land back into wetlands, is taxed at its market rate, which is typically very high. Staff at the Natural Resources Conservation Service have told us that more than half of the otherwise likely WRP enrollees have turned away after learning that their taxes may greatly increase if they participate. Several other sources have similar complaints – that people simply aren’t interested in restoring their wetlands when they learn how much it will cost them.

Several attempts have been made to correct this problem, but there are significant obstacles in Wisconsin law to a simple solution. The State has most recently addressed this issue in its biennial budget by inserting a clause that creates a new class of land, called “undeveloped land,” which includes all wetlands. Lands in this class are to be assessed according to their market value and taxed at half the assessed rate. We will see how this step impacts the decisions of landowners to restore or not to restore their wetlands.

More and more agencies and non-profits are recognizing the severity of this issue, and a panel including the Wisconsin Department of Natural Resources,Wisconsin Department of Agriculture, Trade and Consumer Protection, and the Wisconsin Department of Revenue discussed the impacts of use-value on conservation at the annual meeting of the Wisconsin Land and Water Conservation Association on December 4th, in Madison. Wisconsin Wetlands Association has received a grant from the McKnight Foundation to spearhead a coalition to study the impacts of use-value taxation on wetland conservation in Wisconsin and to explore alternative solutions. We will be coordinating with many parties to explore systematically how use-value taxation has affected conservation in Wisconsin and to propose and evaluate solutions to this problem.

What we learn in this process will be important news for land trusts, watershed organizations, and other grassroots groups that are interested in conserving wetlands in Wisconsin.We invite individuals and organizations to contact us if you are interested in participating in this coalition, and we welcome comments, not only from Wisconsin’s grassroots, but also from the rest of the Great Lakes Basin, where different versions of a use-value taxation policy have been implemented with various results.


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Images courtesy of Steven Huyser-Honig,
West Grand Boulevard Collaborative, & Yellow Dog Watershed Preserve.