Time to account for the state’s troubled conservation easements
Author: Kimmi Lewis - March 16, 2018 - Updated: March 15, 2018
When legislation for perpetual conservation easements was first proposed in the United States Congress, the terms “rare” and “unique” were used to describe conservation easements eligible for the federal income tax deduction. The program was intended to be used judiciously for the purpose of giving landowners a financial incentive to give up their surface development rights from now until the end of time.
In actuality, advocates for perpetual conservation easements have taken the “more is better” policy for at least the past 15 years, even in the face of endless reports of Coloradans losing their family farms and ranches due to the overvaluation of such easements. Perpetual conservation easements may sound like a wonderful concept, but they have been remarkably devastating for too many landowners.
Heartbreaking examples have been related through the years of the sad experience of many farmers and ranchers in our state who, lured by the promise of the tax credits, put up part of their land for application to the program, received the needed appraisals, and went through the whole process; only to find, years later, that the state disagreed with the appraisal and wants its money back.
These are not the Warren Buffets and Ted Turners of the world who fall victim to this. These are, for the most part, 2nd, 3rd, or 4th generation small family farmers and ranchers, most working outside jobs to try and make ends meet. These are good people, doing all they can to hang on to their land so that they can pass it on to their own children and grandchildren. These people are told they are doing a good thing, only to later be told by the same state government that put the program in place that they need to repay sometimes hundreds of thousands of dollars due to a disagreement over a 3rd party appraisal that was no fault of their own.
Adding insult to injury, even once they do manage, somehow, to pay back the credits, they still do not get to reclaim control of their land. Their rights are gone. Forever.
This is but one of the unforeseen problems that have periodically plagued the conservation easement program. Almost everyone recognizes and agrees that there are issues with it, and over the years the program has been tinkered with to try and address some of these. Previous audits of the program have, in fact, confirmed that problems exist. But the central difficulty remains, which is that so much of the system is unaccountable . There is no central database accounting for the conservation easements in the state. Without a public accounting of the land tied up in conservation easements, we can do all the audits we want but will never be able to fully address the issues that keep coming up, year after year.
With around $1 billion having already been expended by the state in tax credits, why in the world is there no central, readily-available, county-by-county public accounting of this information? We are not talking about disclosing private information – only relevant data that is currently technically public but buried in the files of individual county clerks and recorders.
There was a study completed by Colorado State University last year, but it was merely an analysis of the potential economic benefits of conservation easements; not a full accounting of conservation easements in the state, assembled into a searchable database. Even the study’s authors pointed out that “information on specific properties claiming a tax credit through the Colorado Conservation Easement Tax Credit program is not publicly available.”
This is a billion-plus program, that locks up land from any kind of development for all of eternity, and which has generated serious questions and concerns from affected landowners in all parts of the state. We do not have a public accounting of where these lands are, who is managing them, whether they are fulfilling their purpose, and whether tax credits are being paid for them or have been paid back by the owner.
For many landowners, conservations easements work; and we have no interest whatsoever in the state dictating to a property owner how they should or should not manage their property. But for too many other property owners, it is not working; in some cases devastatingly so. This is an expensive program, one in which the state is legislating from the grave, telling future generations of landowners what they can and can’t do with their property. The conservation easement program has some problems, but we cannot even begin to address any of them if we do not have a full accounting of it.