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Virginia is the next big place
where land preservation will take place. Everywhere north
(Maryland, Pennsylvania, New Jersey) is going great guns
purchasing farmland.
PDR programs
· can
make fiscal sense by offsetting the future costs of
infrastructure.
· can
be good for bond ratings, by showing that a community is
planning for the future and has a handle on its capital budget.
·
tend to be very
popular with citizens
Localities have everything they
need, legislatively, to enact PDR programs – but not funding.
Funding at the state level will
not happen until localities let their legislators know the issue
is important to them. Nationwide, PDR funding averages 60% from
states and 40% local sources.
Local PDR funding sources:
portions of the real estate tax, transient occupancy tax,
rollback taxes, and general funds. Federal and state grants may
also be available, with local match.
The longer a locality waits to
establish a program, the more money it will have to spend to
have an impact. ‘Pay as you go’ cannot deliver enough money for
big projects. Debt to finance PDRs is less expensive than debt
to finance infrastructure.
Fiscal Impact Models –
These can help project the anticipated costs of proposed
projects. Frederick County has one designed and awaiting
adoption; Shenandoah County has a simpler model that also is
brand new.
Installment Purchase Agreements
– With IPAs, the purchase payment is delayed, to the advantage
of both the seller and the locality. Interest payments provide
the farmer a stream of income for a term of up to 30 years, with
a balloon payment at the end. Capital gains taxes are deferred
and in the meantime the farmer receives interest, maximizing the
financial benefit. Farmers often want to see farmland remain in
farming. The IPA payment structure can give the landowner a
reason to say yes. Localities can use IPAs to leverage
funding to accomplish more projects. Options like Treasury
bonds and VRA below-market financing can make borrowing cost
effective.
Role of Virginia Resources
Authority - VRA can use the state’s credit to access
markets for localities. A locality, for example, might design
an IPA program and arrange the financing through VRA. VRA also
can help fund local match, for example, if a locality gets
federal funding for a PDR project.
For more information,
contact Shenandoah RC&D (248-3321) or VCC (540) 886-3541.
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