Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Current Use topic
No spam. Unsubscribe anytime.
Committee hears overview of Vermont’s Current Use program, fiscal impact on education fund
Summary
Ezra Holben, fiscal analyst, told the Ways & Means Committee that Vermont’s Current Use program reduces landowners’ property taxes by replacing market assessments with an annually set use value, and that those savings show up as foregone municipal and education revenues.
Ezra Holben, fiscal analyst, gave the committee a high‑level overview of Vermont’s Use Value Appraisal program (commonly called Current Use) and its interaction with the education fund.
Holben said Current Use was established in 1978 to encourage preservation of agricultural and forest land and to lower property taxes for participating landowners. “You can think of those as property‑tax or education‑tax expenditures,” he told the committee, explaining that property owners who enroll pay taxes based on a use value (set per acre by an advisory board) rather than the assessed market value.
Holben walked members through how use value is calculated: enrolled acreage × an annually set use value per acre × the municipality’s Common Level of Appraisal (CLA) yields the enrolled value that is taxed. He provided the values published for tax year 2024 that appear in the PVR/PBR materials presented: the advisory board‑set use value examples shown in the briefing included $188 per acre for forest land and $4.83 per acre for agricultural land (the presenter noted those were the board figures in the PBR report). Holben also said the advisory board sets values annually and that program rules differ for managed forest land versus reserve forest land after Act 146 (2022) created a separate reserve‑forest classification.
Holben described how Current Use appears in budget tables: property‑tax savings to landowners are recorded as foregone municipal or education revenue. He cited PBR figures (tax year 2024) that list total foregone municipal plus non‑homestead education taxes of about $76,192,000; Holben said non‑homestead reductions that affect the education fund were roughly $55,700,000 in 2024 and represented about 7.02% of the non‑homestead tax base figure cited in the briefing materials.
On municipal compensation, Holben explained the hold‑harmless mechanism: the state makes a payment from the general fund to cover municipal revenue foregone because of current use. He said the Department of Taxes indicated a hold‑harmless payment for fiscal 2025 of about $19,770,000.
Holben also explained the land‑use‑change tax charged when a parcel or portion of enrolled land is developed or withdrawn: the tax is assessed as 10% of the fair‑market value of the land removed from the program. Under the statutory formula recited in the briefing, half of that amount goes to the municipality (subject to an up‑to‑$2,000 per acre limitation in the statutory language described by staff) and the remainder is split 75% to the general fund and 25% to the education fund.
The committee asked for additional technical details. Members noted that many working farmers rely on Current Use to stay in business and asked staff to supply follow‑up information about annual administrative costs (for example, costs for required forestry plans on enrolled parcels) and the legislative history that determined why municipal reductions are made whole while education‑fund reductions are not. Holben said Property Valuation & Review staff (PVR) would be invited to give a deeper technical briefing in a subsequent meeting.
Ending: The committee scheduled more detailed Current Use testimony in the coming days with PVR and Legislative Counsel on legal questions; staff will follow up with the advisory‑board values and examples requested by members.
