Money to preserve N.C.'s land

DURHAM -- We North Carolinians find ourselves in 2007 standing on the brink of a deep but narrow canyon. Across it lies a greener and happier future, secured by substantial new investments in land and water conservation.

We're tempted to borrow the money we need and leap across the gap -- but looking over the edge we see far below the dangerous rocks of a bond rating decline. To the left of us there's the sturdy bridge of dedicated conservation funding, spanning the canyon. But the bridge is guarded by twin giants Realtus and Developus. Behind us we hear the din of the steadily advancing armies of Overdevelopment, so we know there is no time to lose.

The question is, do we take the risky leap, or do we fight the powerful giants to let us across the bridge?

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Our leading politicians will have to make this tricky decision soon, with help from an excellent new report from the Land and Water Conservation Commission. The report strongly encourages state leaders to find some way of funding the Land for Tomorrow Coalition's proposal for an additional billion-dollar investment in conservation.

Last year the Governor's Office opposed putting a conservation bond referendum on the ballot, citing fears of a costly decline in the state's excellent bond rating. The obvious work-around is a dedicated funding source that could guarantee repayment of the bonds over time, but development interests have often managed to block the most reasonable funding mechanisms for conservation.

For example, conservationists would love to simply raise the real estate transfer tax, currently set at a modest $1 for every $500 in property value. Real estate agents, however, oppose raising the transfer tax, which they argue is discriminatory in its focus on just one industry, given the fact that land conservation benefits us all.

While everyone certainly benefits from conservation, a much smaller subset of the population (real estate interests and developers) profits immensely from destroying our natural heritage. But yes, the real estate transfer tax is a blunt instrument for funding land conservation, because it applies equally to sales of both pre-existing structures and new developments.

A fairer and more precise method of generating revenue for conservation would be a tax that fell only on new construction. So the General Assembly should consider enacting a "Green Space Preservation Tax," which would apply like a local development impact fee, except on a statewide basis. If this tax raised an average of $2,000 from each new $200,000 house, the statewide total for conservation would be well over $200 million each year.

Wouldn't a Green Space Preservation Tax would force many low-income citizens out of the market for new homes? The concern is quite easily addressed. All the legislature has to do is set up the new system on a progressive rate schedule. Affordably-priced properties would be taxed much less on a percentage basis than luxury homes.

Other states already have progressive real estate transfer taxes, and no legal reason exists why the same system could not be adopted in North Carolina, either for the transfer tax or for a new Green Space Preservation Tax.

A progressive development tax of either sort would pose little real danger to the profit margins of real estate agents and homebuilders; they pass such taxes directly onto consumers. Florida provides evidence for how smoothly this process can work. Despite higher transfer taxes and widespread impact fees, not to mention a steady stream of devastating hurricanes, Florida developers and real estate agents continue to rake in profits.

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It appears conceivable that the giants of the lobbying world can be convinced to let state leaders establish a modest and progressive development tax that would allow us safely cross the bridge. However, Realtus and Developus might be under some kind of magical spell that makes them immune to logical arguments. Then it might be necessary to put a stand-alone bond referendum on the ballot this November, making a leap of faith that future generations will thank us for protecting North Carolina's legendary beauty from the impending onslaught of Overdevelopment.

Ron Sutherland is a Ph.D. student in the Nicholas School of the Environment and Earth Sciences at Duke University.