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Senators, keep promise to fund LCHIP (complete article from source)
Source: Concord Monitor Online, by Paul Doscher
June 18, 2007
When the Legislature created a commission in 1999 to study the challenges facing New Hampshire's natural and cultural heritage, lawmakers asked some of the state's most respected thinkers to craft a plan to protect that heritage. The plan they created, born from a sense of urgency and crafted from consensus, is the Land and Community Heritage Investment Program.
The commission recommended funding LCHIP at $12 million annually. Back then, LCHIP was embraced by the Republican-dominated Legislature. It was funded with $12 million in its first biennium, $6 million a year. In the following two biennial budgets, LCHIP averaged an appropriation of $750,000 a year.
Today, LCHIP's future lies in the hands of new budget makers. This time, the Democrats are the majority party, and during the elections that brought them to power, most Democrats made commitments to full funding of the program. Gov. John Lynch put $6 million a year in his biennial budget for LCHIP.
The House created a dedicated fund for LCHIP which raises $6 million a year. The Senate has come up short of the governor and the House, appropriating only $6 million from the general fund for one year of the two-year budget, with a committee appointed to further study prospects for a dedicated fund to provide LCHIP income in year two.
By June 21, budget negotiators will have to decide whether to provide LCHIP with a dedicated source of revenue from a tiny increase in the real estate transfer tax, a one-year appropriation from the general fund or some third way divined by the conferees. The House version increases the total transfer tax by 60 cents per thousand (from $15 to $15.60, a 4 percent increase) and would provide LCHIP with a permanent funding source of about $6 million per year. The Senate version taps the state's general tax revenue for year one and charges a special committee to propose a permanent funding plan for year two of the biennium. The Senate still has an opportunity to broker an agreement that gets the job of funding LCHIP with a dedicated fund done this year.
A logical source
Whether this is done with an increase in the real estate transfer tax or within the scope of the existing tax (thereby avoiding a tax increase), the real estate transfer tax is the most appropriate means by which to create such a dedicated fund.
There is a strong nexus between real estate values and the values protected by conserving open space and historic buildings. There is a mechanism in place to collect these funds that works and that has sufficient accountability. Perhaps most important, every real estate investor would also be investing a very small amount in our state's natural and historic heritage.
In recent polls of New Hampshire voters, more than 80 percent said that they support protecting important lands in our communities and that, by a large majority they are willing to pay higher taxes to do it. The House-proposed increase in the real estate transfer tax would add $60 to the buyer's cost of acquiring a $200,000 house. That's an increase of 0.03 percent.
According to the New Hampshire Housing Finance Authority, this tiny increase is by itself too small to have any impact on the ability of low- and moderate-income residents to purchase homes.
Realtors' resistance
Sadly, some of our friends in the real estate community don't share this view. The New Hampshire Association of Realtors has lobbied hard to kill the House-proposed LCHIP fund because, it argued, this tiny tax increase is bad for the real estate market. Pardon my cynicism, but this is just plain silly. On a $200,000 home with a $1,500 monthly mortgage payment, only $1 of the $1,500 is attributable to the added $60 in real estate transfer taxes paid at the point of sale. I find it hard to believe that increasing a mortgage payment of over $1,500 month by $1will have any impact at all on people making a decision to buy a home or to invest in commercial real estate.
Thankfully, some Realtors are more progressive than their association. They see the logic of connecting a funding source for land and historic preservation to real estate sales. They know that protecting our landscapes helps protect the value of our homes and businesses. They acknowledge that there's a good reason to ask those who buy and sell land and buildings to help preserve important land and buildings. Further, when the market gets hot and prices for land go up, so will the funding available for land conservation.
Many have forgotten that the real estate transfer tax was originally created to support land conservation. Back in 1978, the Legislature established the transfer tax to fund a state program to preserve farmland. The Legislature later redirected that funding to balance the general budget, effectively killing the agriculture preservation program.
The new Democratic leadership told us, when we were being courted for our votes, that it would fully fund LCHIP. The only way to do that is to create a dedicated fund that will keep pace with inflation and be insulated from the ups and downs of political budget battles.
The House has the right idea for how to do this, and now our senators need to seize the day and respond to the 80 percent of New Hampshire voters of all political stripes who support keeping New Hampshire's landscape (in the words of Robert Frost) "everlasting and unfallen."
(Paul Doscher of Weare is vice president for land conservation at the Society for the Protection of New Hampshire Forests.)
Click here for complete article from Concord Monitor Online
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