Current Use Advisory Board to update decades-old formulas as agricultural use values rise

The Current Use Advisory Board set the annual use values this week and is preparing a formal update of administrative rules that govern Vermont’s current use property-tax program, Jill Grama, director of property valuation and review at the Department of Taxes and chair of the advisory board, told legislators.

The advisory board’s work matters to landowners because the “use values” replace fair-market value on enrolled property for tax purposes; as the figure used to calculate exemptions rises, enrolled landowners’ tax savings shrink. Grama said the agriculture use value has climbed notably in recent years because its formula relies on a rental-rate factor that has trended upward.

Grama described the board as “a statutory construct” with membership and duties prescribed by law. She said the board’s main duties are establishing use values each year, holding required public hearings and overseeing the administrative rules for the current use program, which have not been updated since 1985. “We are actively working on updating those,” she said, and the board is preparing the public-hearing and rulemaking steps that include public comment periods and review by the Legislative Committee on Administrative Rules.

Board members met on Wednesday and set the 2025 use values, Grama said. She described the agriculture formula’s reliance on a rental-rate measure and the forestry formula’s use of a forest-management factor (currently 0.25), and said the formulas use a five-year smoothing to blunt year-to-year swings. Grama said the agriculture figure under the current method would have been $7.76 per acre for 2025 without averaging; the five-year average reduces that annual volatility.

Representatives on the committee pressed for more analysis of the formulas and the local impacts. “It’s a little concerning to see the cost doubling to the farmer when they’re still receiving the same amount for for what comes off of that acre of land, basically,” Representative Byrd said, summarizing concerns that rising use values can increase tax bills for farms even as farm product prices remain flat. Representative Burke suggested looking at broader options for property-tax revenue as part of larger education-funding conversations, including revenue from second or vacation homes.

Grama said changing the prescribed calculation would likely require legislative action because parts of the formulas were enacted into session law (she referred to a 2010 session-law directive based on a prior memorandum). She said the advisory board can recommend legislative changes but that outside economic analysis—by an agency economist or external consultant—would likely be needed before proposing a new method.

Grama outlined statutory timing and procedural points: the board must establish criteria by Feb. 1, hold a public hearing by Oct. 15 and produce use values by mid-February so listers and towns can process and bill enrollments in time for summer tax cycles. She also described operational partners for current use administration—landowners, county foresters, town listers and assessors, town clerks (who record contingent liens at enrollment and remove them when the land-use-change tax is paid), the Agency of Agriculture, and the Department of Forests, Parks and Recreation.

Grama noted public hearings for the advisory board have been sparsely attended and said the board plans to improve outreach and post materials online. She pointed legislators to a December report on the forest-reserve legislation (Act 146, 2022) and the advisory board’s materials, which include the exact calculation language for agriculture and forestry use values.

Legislators asked about data linking conserved land with current-use enrollment and whether the department could provide statewide comparisons; Grama said the department tracks conservation status where it is part of a forest enrollment category but that a statewide consolidated map might require assistance from other agencies.

The advisory board plans to move forward with administrative-rule drafting and more detailed review of the agriculture and forestry formulas; Grama said the board and the agencies would likely invite subject-matter staff—such as an economist from the Agency of Agriculture—to explain the calculations before any recommendation to change statutory formulas.