End of tax credit might mean flow of land gifts could lose ground

December 10, 2013 

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Bob Kellam, 66, and his wife, Susan Wyatt, 65, walk back to their farm production shed Monday after feeding their chickens in their well-ordered 6-acre open space filled with gardens, hoop houses and a hot house or two on the Kellam-Wyatt Farm in East Raleigh.

HARRY LYNCH — hlynch@newsobserver.com Buy Photo

Bob Kellam and Susan Wyatt are retired from the Environmental Protection Agency, but they’re not done protecting the environment. The husband and wife announced a conservation easement last week that will eventually donate their 58-acre farm near U.S. 264 and New Bern Avenue to Raleigh’s City of Oaks Foundation.

The decision is a wonderfully generous one. The property is valued at $3.7 million, but the couple are willing to forsake the cash for what they consider a greater fortune: land forever open as a natural asset for future generations.

“We would like for the farm to remain a sanctuary for wildlife and a place where nature education and conservancy can be taught,” Kellam told the Raleigh City Council recently.

The Kellam-Wyatt Farm on North Rogers Lane joins two other precious properties donated in recent years to the growing city in which open land is becoming scarce. But the good news comes amid a discouraging end. The easement will be the last before a state conservation tax credit expires Dec. 31 as part of tax code changes approved by the Republican-led General Assembly.

The new legislation eliminates a raft of tax credits and deductions to support a lower, flat state income tax rate. Average taxpayers may see a few more dollars in their take-home pay as a result of the changes, but North Carolina may get less of what Kellam and Wyatt consider more valuable than money.

North Carolina was a national leader when it established the income tax credit for important natural land donations in 1983. Since then, more than a half-million acres of natural landscape in hundreds of locations have been permanently protected. Now land that might have been donated in the future could be used instead for big box stores, housing developments and parking lots.

It’s a curious thing that the legislature’s conservatives would not favor conserving, particularly when it involves the state’s most precious natural assets.

Sen. Bob Rucho, a Mecklenburg Republican and one of the main authors of the tax changes, says talk of land donations drying up after the credit expires is off the mark. Rucho says people give land for many reasons beyond a tax credit, and indeed Kellam and Wyatt said the credit was not a significant factor in their decision. The senator also notes that donors will still be eligible for federal tax deductions.

Finally, Rucho says, the loss of the credit may actually spur donations. He says land owners will save so much under the new tax plan that they’ll feel more inclined to donate land. “So it cuts both ways,” he says.

But land conservation experts say ending the tax credit will cut only one way – it will cut the amount of land donated for conservation.

“It has been a really important tool that’s been used very effectively. We are certainly going to be very sad to see it go,” says Camilla Herlevich, executive director of the North Carolina Coastal Land Trust.

Herlevich, who has worked in land conservation 25 years, says, “The conservation tax credit has been the determining factor in many transactions that we’ve worked through.”

The rush to take advantage of the credit speaks to its influence. Herlevich said the Land Trust has obtained 50,000 acres of land during its 22 years in existence. She expects to close on 10,000 acres in the last month before the credit expires. “We’re crazy,” she says. “We have three closings scheduled this week and three next week.”

Clearly losing the credit will mean the state will lose future land donations. Rucho’s notion that lower taxes will inspire the grateful rich to turn over their land for preservation belongs on the shelf of failed ideas next to the trickle-down theory. It’s not too late to save future open space. In its next session, the legislature should be conservative and reinstate the credit for land conservation.

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