VIRGINIAforever Budget Briefing is December 17

VIRGINIAforever will hold its annual budget briefing meeting on Wednesday, December 17 at 3:30pm in Richmond. Presentations on the FY16 state budget submitted by Governor Terry McAuliffe to the General Assembly will be given by the Secretary of Natural Resources, the Office of the Secretary of Agriculture and Forestry and the Director of the Department of Environmental Quality. Space is limited. For details, please contact Ginny Boland, gboland@mwcllc.com or 804-775-1907.

Looking Ahead: Virginia Land Preservation Tax Credit

Established in 2000, the Land Preservation Tax Credit (LPTC) is an income tax credit of 40 percent of the value of land located in Virginia which is conveyed by taxpayers to a public or private agency for historical or conservation preservation, agricultural use, forest use, open space and/or natural resource conservation. The conveyance must be in perpetuity. The LPTC is governed by the Code of Virginia § 58.1-510 to 513 and §170(h) of the United States Internal Revenue Code of 1986, as amended. To date, more than 590,000 acres have been conserved under this program.

As we all know, the Commonwealth is experiencing a budget shortfall. Recent media reports suggest that adjustments to the LPTC are being considered as part of 2015 budget-balancing strategies. VIRGINIAforever feels strongly that the LPTC must stay intact.

First, the LPTC is effectively meeting its public policy purpose. As the Joint Legislative Audit and Review Commission (JLARC) noted in its “Review of the Effectiveness of Virginia Tax Preferences” (2011), since the LPTC was established in 2000, “voluntary land preservation in Virginia has increased ten-fold,” with some $1.2 billion in tax credits having been issued for 540,000 preserved acres whose total appraised value was $2.5 billion. In pure return-on-investment terms, the LPTC has been extraordinarily successful. In addition, a 2012 JLARC study characterized the LPTC as a cost-efficient way to conserve land, both because it encourages the donation of conservation easements and because it allows private and federal resources to be leveraged. The LPTC is capped at $100 million (indexed to the CPI) for each year. This cap provides for careful program control and forecasting, while allowing conservation-minded Virginians to take advantage of an effective and efficient tax credit to leverage their donations.

Second, we do not believe adjustments to the LPTC will generate immediate savings. The LPTC is designed to be especially beneficial to land-rich, cash-poor landowners. The law therefore provides that the tax credits are transferable among taxpayers, and allows credits to be taken for a period of 11 years, at a maximum amount per year of $100,000 per taxpayer. This means that the fiscal impact of the credits generated in any one year is spread out over a period of succeeding years. By the same token, the credits that are claimed in any one year may have been generated in any of the previous 11 years. Thus, any attempt to curtail the generation of credits will only have an effect over time. There is no way to dramatically reduce the fiscal impact of the program within a one- or two-year timeframe. Even if no new credits are generated in a particular year, tax credits that have been generated in previous years will continue to be claimed. And it is those credits – the ones being claimed – that have a fiscal impact.

For these reasons, VIRGINIAforever believes that restraining the program is not a useful way of addressing the Commonwealth’s revenue shortfall in the short term. We encourage friends of VIRGINIAforever to show support for this important conservation mechanism.

VIRGINIAforever News

VIRGINIAforever Chairman Pens Opinion Article on Virginia Oyster Month
An opinion article authored by Bob Dunn, chairman of VIRGINIAforever, was recently published in the Richmond Times-Dispatch. Dunn highlighted November as Virginia Oyster Month, as proclaimed by Governor Terry McAuliffe, and the increasingly important role that the oyster plays in boosting the Virginia economy and keeping the Chesapeake Bay clean. He notes that to continue to realize the benefits of oysters and other natural resources, the Commonwealth must invest accordingly.

VIRGINIAforever Secretary/Treasurer Appointed Board Chair of VCU Rice Center
Brooks Smith, secretary/treasurer of VIRGINIAforever and a partner at Troutman Sanders, was recently named Chairman of the Board of Trustees of the VCU Rice Center. The Rice Center is Virginia Commonwealth University’s field station devoted to a broad array of environmental research, teaching and public service. Its board is composed of distinguished individuals who provide broad oversight of the Rice Center’s operations, programs and vision.

VIRGINIAforever Board Member Highlights Chesapeake Bay Foundation’s Economic Report
In October, the Chesapeake Bay Foundation issued a report titled “The Economic Benefits of Cleaning Up the Chesapeake.” This first-ever analysis finds that cleaning the bay will bring financial benefits each year that are more than four times greater than the cost of the cleanup — $22.5 billion a year in benefits versus about $5 billion a year in costs. In covering the report, a Richmond Times-Dispatch article notes that the Chesapeake’s restoration doesn’t focus just on the bay itself. Many improvements, such as planting and protecting trees, are being made far inland. Those measures should clean waters that ultimately reach the bay. In a corresponding guest column in the Richmond Times-Dispatch, Ann Jennings, executive board member of VIRGINIAforever and Virginia executive director of the Chesapeake Bay Foundation, writes “The analysis by our experts clearly demonstrates that the environment and the economy are two sides of the same coin. You cannot have one without the other.”

Upcoming VIRGINIAforever Event: 2015 Legislative Reception
VIRGINIAforever is in the process of planning our first legislative reception to take place during the 2015 General Assembly session. We hope this event will continue to raise our profile among decision makers as we work to fulfill our mission to increase funding for land preservation and water quality improvements in the Commonwealth.

Very truly yours,
Robert L. Dunn
Chairman