Debate to Continue on Land Use Change Tax

It was a Goldilocks moment Sept. 2 in a public hearing on the Land Use Change Tax (LUCT), which brought in proponents of keeping the tax’s profits going solely to conservation, advocates of using the funds to reduce property taxes, and everything in between.

But the Town Council will take its time to deliberate on which solution is “just right” for Derry.

According to Council Chairman Mark Osborne, the Council placed a discussion of the LUCT on its May 20 agenda. On June 3, the Council unanimously agreed to hold a public hearing on potential changes to the distribution of the funds, which are assessed whenever a landowner takes his or her property out of Current Use status. On June 17, the Council voted unanimously to schedule a public hearing.

A memo prepared by Larry Budreau, Acting Town Administrator, stated that the then-Council voted April 1, 1997 to place 100 percent of the Current Use Penalty Revenues in the Conservation Commission’s Land Acquisition fund.

“I would like our speakers to be informative but not repetitive,” Osborne said at the beginning of the public hearing. Noting that the Council also had a workshop scheduled with the Planning Board, he urged speakers to limit their comments to five minutes.

Resident John Burtis said he was chair of a Land Advisory Committee in 2005, studying land use in the town and producing a “lengthy report” that he distributed to the Council. Burtis called the results of the report “eye-opening.”

For the report, Burtis’s area of study became the cost of various land uses to community services such as police, fire and road work. The demand for services from residential development “far outweighed” the tax revenue from these homes, Burtis observed.

In 2005, that meant a home with two schoolchildren in residence would have to be assessed at $575,000 in order to generate enough tax income to mitigate the town services needed. “Anything under $575,000 and it would be a net loss,” Burtis said.

Burtis quoted other studies, including a national study that found that for every dollar received in taxes from commercial and industrial property, 27 cents was required for services; for a working farm or open land, 37 cents; and for a residence, $1.16. A Massachusetts study found for every dollar received in taxes from commercial / industrial, 42 cents was expended in town services; open space, 30 cents; and residential, $1.05. In Brentwood, NH in 2004, the breakdown was 24 cents, farm/open space; 83 cents, commercial/industrial; and $1.17, residential.

“Open space pays for itself,” Burtis contended.

Conservation Commission Chair Margaret Ives said the economic benefit of open space could not be denied. “It saves the taxpayer money,” she said.

Ives urged keeping the distribution at 100 percent, noting that having money in Conservation coffers makes it easier to obtain grants and negotiate with landowners. ‘It gives us leverage,” she said, noting that foundations always ask how much money a town is willing to put toward a conservation project.

Conservation land benefits the town in many ways, Ives said, including open areas for recreation, the 41 gardens at Broadview Farm, a place for Eagle Scouts to do projects, and preventing sprawl.

The town’s history of conserving land goes back to the Depression, she said, when the Town Forest was created. The next conservation project was the Webber land, which was the first prime wetland protected in the state, she said.

The town had a chance to buy the Murdoch-White property on South Main Street, she said, and didn’t. “Do you know what’s there now? The Fairways,” Ives said, referring to the large apartment complex.

Community member Craig Bulkley was part of the Council when it instituted the 100 percent rule. “Our thinking at the time,” he said, “was that the Council had limited funding for matching grants. We looked at several properties and realized that if we didn’t act, they would be gone forever.” The Council and Conservation commission made a priority list, he said, and “we saved a number of parcels that would not be available today.”

But other residents contended that 100 percent simply wasn’t practical with today’s tax burden.
Resident Hal Schnitzlen urged the Council to restore 100 percent of the LUCT to town funds, and to be the administrators of the money.

Former Councilor Janet Fairbanks said she agreed with Burtis that “open space makes sense financially.” But she questioned why so many of the properties being preserved are in East Derry.

“For every home built in East Derry there are three built in West Derry,” she said. Fairbanks is especially concerned with the changes occurring on the west side of Route 28, including, in her neighborhood, 64 apartments and/or condominiums slated to be built within 3/10 of a mile in the Kendall Pond Road area.

“All the good the Conservation Commission is doing will be undone,” Fairbanks said.

She advocated a breakdown of 25 percent to Conservation for maintenance of current properties; 25 percent to go into a fund for acquiring property or easements; and the remaining 50 percent going back to the town.

“We are fortunate to have so many beautiful properties,” resident Kelly Martin said. “I commend the efforts of the Conservation Commission.”

Like Janet Fairbanks, Martin advocated sharing the LUCT revenues among several areas. She wants to see the Veterans Tax Credit raised to the full $500 allowed by state law and recommended that 25 percent of the LUCT go toward that. She suggested that a percentage go toward expanding the Rail Trail to connect with Londonderry’s portion, and that the remainder be allotted to Conservation – but spent only after a vote of the townspeople and approval by the Council.

“The Council looks out for the whole town, while Conservation, by its definition, has a narrower focus,” Martin said.

But Conservation member Ric Buzzanga questioned whether that would work. The Commission needs money so it can act quickly, he said. One of the criteria, he said, is that there is an “eminent threat of development. It’s not good when a property the size of Fairways comes up and we blow it,” Buzzanga said. “We need funds so we can act expeditiously.”

He also responded to Fairbanks, noting that when West Derry properties come up, they don’t always meet the criteria for preservation.

“The best way to lower taxes is through conservation land, and the best people to do it are the Commission,” Buzzanga said.

Resident Arthur Karas said Conservation needs more money, not less, and referenced a $6 million bond approved by the Council 10 years ago. The bond was for preserving land and the Council and following Councils never acted on it, Karas said. He urged the current Council to reactivate the bond.

Resident Paul Needham observed that many of the houses recently built in Derry are near the $570,000 mark and in his opinion, they would generate enough taxes. “You are where you want to be,” he told the Council, and urged them to “stay the course.”

Osborne said the Council will discuss the LUCT at a later date, without being rushed. “We are not going to cram that discussion into tonight,” he said, noting that the Council still had a Planning Board workshop.