Adele C. Morris
Regional planners and environmentalists have observed with concern the loss of productive farmland to urban development. As land values rise along urban fringes, the returns to developing land for housing or commercial enterprise exceed the returns to farming, and even some of the most productive agricultural areas become attractive sites for suburban settlement. Property taxes based on the fair market value of land could accelerate land development by increasing the cost of farming as land values rise. Since 1957, every state has responded to development pressures by allowing or requiring preferential property tax treatment of farmland, and in some states other open space land. Programmes vary from state to state, but the most common policy assesses the land at its value in its current agricultural or open space use (the use- value), as though the land had no speculative value for development. This study examines the policy issues behind farmland preservation programmes, reviews related research and examines the effect of tax relief policies on farmland retention using county-level panel data.
A landowner's property tax liability is determined by the basis to which the tax rates are applied (the assessment) and by the sum of the jurisdictional____________________