Committee reviews formula used to calculate Vermont forest-land use-value appraisal

Catherine Servideo, forest-economy program manager with FPR, reviewed the formula and data sources the state uses to calculate the use‑value appraisal (UVA) for forest land and walked the Agriculture, Food Resiliency & Forestry Committee through the 2025 inputs and results.

Servideo said the calculation begins with an annual harvest stumpage value (a 10‑year average of harvest volumes multiplied by stumpage price by species), multiplies that by a growth‑to‑removals ratio to estimate remaining stumpage on the landscape, divides by total forested acres, applies a 25% management factor, and then divides net operating income per acre by a capitalization rate (derived from a 10‑year average of U.S. Treasury nominal rates and the effective tax rate supplied by the Department of Taxes). "I'm the forest economy program manager with FPR, and I'm the one who does this calculation every year," Servideo said.

Why it matters: committee members said UVA changes affect property taxes, the education fund and landowner finances. Discussion ranged from whether the UVA reflects what landowners actually receive for timber to whether the program's long‑standing management factor remains appropriate given rising management costs.

Key data and sources presented: Servideo said the annual harvest stumpage value used in the 2025 calculation was just under $31,000,000 (based on a 10‑year harvest volume average and a year of stumpage survey data). The growth‑to‑removals ratio applied for the calculation was 2.85 (US Forest Service inventory), and total forested acres used in the denominator were roughly 4.3 million acres (US Forest Service, 2022 inventory). The management factor is a fixed 25%. Servideo gave the 2025 calculated use value before smoothing as $318.52 per acre and said the program then averages that result with the previous four years to set the official UVA; the transcript did not record the committee’s final published per‑acre UVA after that five‑year smoothing.

Committee questions and technical clarifications: Representatives asked whether the stumpage values reflect amounts paid to landowners or delivered market prices. Servideo confirmed the stumpage survey is reported by consulting foresters and mills and represents payment to landowners (it excludes transport and intermediary costs). She explained mills report volumes by product and species and, where available, county of origin. Firewood volumes are surveyed separately (the most recent residential fuel survey cited was 2018–19, with another survey planned this year pending grant funds).

Several members contrasted rising UVA figures with farm and logger incomes. One representative noted that use values for agricultural and forest land have increased over a decade while dairy farm receipts remained flat, and asked why UVA has increased roughly one‑third since 2021; Servideo pointed to the combination effects of the growth‑to‑removals ratio and changes in the capitalization rate (a lower denominator increases calculated value). She emphasized the calculation uses multiple smoothing steps (a 10‑year harvest volume average and a five‑year UVA average) to reduce year‑to‑year volatility.

Program history and policy context: staff recalled that earlier program design attempted more granular site classes and multiple forest use categories but was simplified to three base use values for administrative practicality. Committee members raised sugaring as an example of an evolving on‑the‑ground use (and asked whether sugaring revenue should be reflected differently); staff said assessing sugaring’s net income and costs would require further study with the sugaring community.

Follow-up and outstanding items: members asked the Department of Taxes to confirm how the effective tax rate is derived; staff noted Jill Remick (Department of Taxes) will be asked to confirm that rate and its calculation. Members also suggested inviting Allie (Allie/ Ali) Kasiba to present the forest carbon inventory she is preparing to show trends in carbon pools over time. Several speakers urged further consideration of whether the static 25% management factor remains appropriate given rising management, compliance and infrastructure costs for landowners.

No formal motions or votes were recorded on the UVA formula during this session. Committee members signaled interest in additional briefings and in ensuring any changes be evaluated for impacts on the education fund and on landowners before policy changes were proposed.