Land Conservancy: Farmland losses will mount if conservation tax incentive isn’t restored

November 21, 2014

Ohio’s largest land trust is worried that the state may lose thousands of acres of farmland to development if Congress fails to restore and make permanent a bipartisan tax incentive for conservation by the end of 2014.

The nonprofit Land Conservancy, which has permanently preserved nearly 40,000 acres in northern and eastern Ohio, including 21,000 acres of farmland, is urging the U.S. House of Representatives and Senate to restore the vital conservation tool during the current “lame duck” session. It passed the House this summer on a bipartisan vote and is now pending in the Senate.

In the Ohio delegation, U.S. Reps. Dave Joyce, Jim Renacci, Robert Latta, Robert Gibbs, Jim Jordan, Steve Chabot, Brad Wenstrup, Pat Tiberi and Michael Turner voted in favor of the permanent tax incentive for conservation.  U.S. Sen. Sherrod Brown is a cosponsor of the pending Senate bill.

“This is an extremely important tool for farmland preservation,” said Andy McDowell, vice president of western field operations for the Land Conservancy, which works in 17 Ohio counties.

Since 2010, landowners who took advantage of the federal tax incentive while preserving property with the Land Conservancy permanently preserved 9,048 acres valued at $18.5 million.

The federal tax incentive is for farmers and others who voluntarily preserve their land with a conservation easement, a legal instrument that bans or severely restricts development while keeping the property in private ownership. The easement runs with the land, so it remains in place if the property is sold or passed down to the next generation.

The Land Trust Alliance, a national organization that includes about 1,800 local land trusts, calls the conservation easement “America’s best tool” for preserving the country’s farms and natural areas. Lands placed into easements can continue to be farmed, grazed, hunted or used for outdoor recreation and wildlife conservation.  Lands remain on county tax rolls, strengthening local economies, sustaining and creating jobs.  These lands also remain in families, to be passed to future generations.

The land conservation tax incentive put into place in 2006 is directly responsible for the conservation of more than two million acres of farmland and natural areas, according to LTA officials.  Congress allowed this law to expire, leaving in limbo local landowners who want to place lands into conservation.

The proposed incentive would help landowners of modest means choose conservation by allowing qualified farmers and ranchers to deduct up to 100 percent of their adjusted gross income and increase from six to 16 the number of years over which a donor can take deductions.

McDowell said easement donations can sometimes take years to execute because they are major life decisions.  He said the on-again, off-again nature of the tax incentive in recent years has discouraged landowners from participating, and a permanent measure would send a positive signal to farmers.

“Certain aspects of the incentive, such as the 100-percent AGI deduction, are significant to some farmers, while for others the ability to take the deduction over 16 years is critical,” McDowell said.  “At the end of the day, the incentive is very important both to farmers and to those of us seeking to conserve land.”

In 2013, McDowell worked with Robert and Deborah Bumb – fifth- and sixth-generation farmers, respectively – to preserve about 750 acres of farmland in western Huron County, southwestern Erie County and eastern Sandusky County.  Robert Bumb said while the tax incentive was not the primary reason he agreed to the easement, it helped in his longer-range planning.

“We preserved our farmland because we did not want to see it developed,” Bumb said.  “But the conservation tax incentives are definitely important for many farmers who want to do this.  In our case, the incentives are helping us plan for the future.  Any money I save as a result of the tax incentive will be used to buy equipment and put in (drain) tiles – and that’s good for the local economy.”

The Land Conservancy, which is based in Moreland Hills and has offices in Cleveland, Akron, Chardon, Orrville, Oberlin and Medina, has made extensive use of conservation easements in the preservation of farmland and natural lands.  Landowners exchange their development rights – often a tract’s most valuable asset – for limited tax credits.

Ohio is losing farmland at a rate of 50 acres per day. Middle-class “asset-rich, cash poor” landowners are often forced to sell lands to the highest bidder – lands that have been part of the fabric of their communities for generations.  If Congress fails to act, man landowners may be forced to sell off treasured lands, and many farms, ranches, forests and scenic vistas could be lost.

A coalition local land trusts and more than 65 national conservation, agriculture and sporting organizations are now working together to make the tax incentive permanent in budget and tax reform proposals.  Rich Cochran, president and CEO of the Land Conservancy, said a permanent land conservation tax incentive “might represent the most significant conservation victory this century. With a permanent incentive in place, landowners across the country would have the resources and certainty necessary to protect our nation’s valuable natural outdoor spaces for generations to come.”