Costs and benefits of conserved land debated

With municipal budgets, particularly in coastal areas of Washington County, facing increasing strain, some residents and local officials are looking at how to add new revenue. Among the targets that often come up, along with the state's school subsidies, are conservation organizations that pay either reduced property taxes or may be tax exempt. Those organizations have become a focus in Lubec, where the board of selectmen is preparing to send them letters asking for payments in lieu of taxes to help pay for town services and offset the tax burden carried by local residents. Land trusts, though, note that any taxes lost may not be as great as people may think and point to the numerous contributions they make to towns and the economic benefits of conserved lands to the area.

"We have generations of families that have to move out because they can't afford to live in Lubec," says Selectman Daniel Daley, who spearheaded the move to send out the letters. He says the select board is trying "to be creative" so that residents "can stay on their ancestral property and not be taxed out."

"Most of the community is made up of retirees or young families who have a hard time finding rentals," he says, noting the issue "is all too common for coastal Maine." He adds, "This is not sustainable. Affordability is the number one topic in rural Maine."

Daley says that the high percentage of land in Lubec that is either tax-exempt or in the open space tax category can pit local residents against conservation groups. "I think there's a lot of value to what they offer," he says of the land trusts, but he notes that Lubec "is one of the poorest towns in one of the poorest counties in the nation," and the high shorefront valuation has led to the town having the fifth highest county tax bill among Washington County municipalities and lower state subsidies for the school system.

Inflation, fuel costs, the town's revaluation and more are all adding to the strain. He notes that for some residents their property taxes doubled last year. One issue was a 2023 revaluation in which there were "some inconsistencies" in how properties were revalued, Daley says. "It's a perfect storm," he says. "It's not just the land trusts. It's the lack of jobs, the tax rates and the land trusts, too."

"We're just feeling the pain of the altruistic, conservation issue with the taxpayers stuck with the bill. We need to find a happy medium," he says. "It feels like a forced emigration. It's getting to a crisis."

Carol Dennison, chair of the select board, says the board sent a letter last year to land trusts asking for donations for the town's Safe Harbor project, and she notes that other municipalities ask for voluntary payments in lieu of taxes (PILOTs). Referring to figures in a recent report by the town's assessor, she says, "it's overwhelming how much the land trusts own. They use our roads, our fire department," she says, adding that some of them "have been wonderful to us," with the Butler Conservation Fund's Cobscook Shores, Maine Coast Heritage Trust and Downeast Coastal Conservancy providing monies for specific projects but not PILOTs.

As for the strains on the municipal budget, she points to the constant need for repairs on the 36 miles of roads in the town, updating fire department equipment to meet state regulations, obtaining supplies for the sewer department, increases in the school budget and "the cost of living has gone up so much."

"People like the open space, but the summer residents and visitors are able to utilize it more than those who live here year-round and have to work to pay their taxes."

Tax revenue analysis

The select board's letter was prompted in part by the property tax revenue analysis by Assessor Agent Marc Perry presented at the March 25 board meeting. The analysis was conducted for the tax‑exempt and open space land‑use categories only, although properties designated as tree growth are also listed. Open space and tree‑growth are two of the four state land‑use categories that allow property owners a reduction in assessed property value based on current use rather than market value.

The report indicates that four conservation groups, Downeast Coastal Conservancy, Cobscook Shores Inc., The Nature Conservancy and Maine Coast Heritage Trust, collectively own 3,050 acres with an estimated tax loss of $219,365 within the open space tax category. In addition, Cobscook Shores owns 576 acres in the tax‑exempt category for an estimated tax loss of $69,504 and 37.5 acres in tree growth. There are 2,229 acres owned by the state, town, churches or others that are tax‑exempt. Land conservation organizations own approximately 3,626 acres or 59% of the total open space and tax‑exempt acres in Lubec and 20% of the town's total assessed acreage of 18,200. Other sources, which may include the town's waters, indicate the total acreage as 21,280, so the percentage owned by conservation organizations would be only 17%.

Lubec raised $4.68 million from taxpayers for its municipal and school budgets in FY 2025, so, with a current mill rate of 20.2, the $290,000 not received from conservation organizations means about 6.2% of the tax burden is being made up through a redistribution to all of the other property owners.

However, Perry notes that, along with land trusts, quite a few private landowners have acreage in both the open space and tree growth tax categories. He points out that conserved lands "may not affect the taxes as much as people think, if they were taxed at full value." He adds, "People want their taxes to stay the same, even though everything is going up."

Of the open space, tree growth and tax-exempt categories, Perry notes, "The laws are the laws. If you want to change them, that's in Augusta. You can't do anything locally."

Study examines benefits, impacts

Other studies have taken a broader look at the impact of conservation land on property taxes, including a recent report produced by the University of Maine School of Forest Resources and the Municipal Budgets and Conservation Working Group, made up of conservation professionals and municipal leaders. The working group was established in 2019 by the Washington County Council of Governments and the Downeast Conservation Network. Using a mixed methods approach, the study controlled for other variables to determine the impact of conserved lands on property tax rates in Washington and Hancock counties.

The study notes that conserved land in the state has increased from five percent of the state's land area in the 1980s to more than 20% now. According to the report, there are a total of 702,654 acres of conservation land in the two counties, comprising 19.6% of the total area, with 58% of the land in Washington County. Nearly 60% of the conservation land is under private ownership, while the rest is public.

The study found that economic benefits of conserved land include $304 million annually in visitor spending, with more than 95% of that attributable to Acadia National Park. Recreation, such as hunting, fishing and boating, is estimated to provide another $58 million in benefits each year, with $20 million of that amount in Washington County. The value of carbon sequestered in standing forests on conservation land provides about $42 million each year from mitigating the effects of climate change. Employment directly associated with managing conservation land is calculated to be nearly $14 million annually. The value of the commercial harvesting of timber and blueberries from conserved land is estimated to be $17.5 million and $4.4 million each year, respectively, and the supplying of clean water and drinking water is assessed to provide almost $17 million annually.

According to the report, land conservation has a very small impact on mill rates on average statewide, with a 1% increase in acres conserved resulting in less than a $1 increase in annual average tax bills. In 2022, the average town had 1,923 acres in conservation, so a 1% land conservation increase would be an increase of 19 acres.

However, the impacts can be meaningful in certain types of communities, with the study finding that towns with low median household incomes experience decreases in mill rates from conservation, while towns with the highest median household income levels see increases in property tax rates. As for the reason, the study speculates, "Perhaps we are seeing these results because towns that are better off economically may be more likely to be growing and developing and have higher raw land values." Conservation also was associated with increases in mill rates in coastal regions and in towns with more than 20% of the land area in protected status. "Increased consideration should be given to conservation in towns that may experience greater tax impacts from it, such as coastal towns and towns with significant amounts of conservation already," the report states. Conservation groups do take into account the percentage of conserved lands in particular towns when they make decisions about possible projects to pursue.

Among the report's recommendations to improve relationships between town and conservation officials are the building of trust through spending time together; defining a project to collaborate on; establishing a shared mission; and approaching the relationship with openness, understanding and a willingness to collaborate.

Contributions outlined

Erin Witham, the coordinator of the Downeast Conservation Network, says, "There are a lot of economic challenges with municipal budgets, and the benefits of land conservation don't necessarily mean more money for property taxes."

Concerning the study that was done in a partnership with conservation organizations and municipal leaders, she says, "We heard each others' perspectives, and I'd like us to continue these conversations." She adds, "We're willing to work to find ways we can help be part of the solution for property taxes. We see the challenges that towns face so that schools and services can be provided."

She notes that towns in Washington County had not been receiving payments in lieu of taxes for federally owned land, and "we wrote letters in support of the towns" for the federal government to make the payments, which she says was done.

Amanda Devine of Maine Coast Heritage Trust (MCHT), who lives in Freeport, observes that the open space lands there mean that people can walk, hunt and have access to the water on acreage provided by land trusts. They hold land in public trust for access, she points out. "It's not just bird-watching, it's hunting and fishing, ATV use. They provide access to the outdoors for a wide segment of the population." Land trusts seek to allow people to be able to do what they've done on their lands and to "keep change from sweeping too quickly across a place."

As for specific contributions, in Lubec MCHT provided $15,000 for an emergency response system and funding for the Safe Harbor project. The land trust is investing in the Boot Head Preserve trail to make it more accessible, and Devine notes it costs money to provide access "to these special places. We hope people recognize" the benefits that are provided. Pembroke has reached out to MCHT for assistance to find land for a cemetery. Cobscook Shores is making a $10,000 annual payment for 10 years for the local roads fund in Lubec, and other conservation organizations also have made contributions to towns in the area.

Devine says that land trusts can help with affordable housing and are working with housing trusts to find land suitable for new housing. "We live in the communities and need the schools and services, too," she says. "Everything's costing more -- we're not blind to that." She believes it's an oversimplification to make land conservation an easy target for why taxes are going up.

A 2024 census report by the Maine Land Trust Network found that, of the 74 land trusts that responded, nearly 93% of land trusts' conserved lands are on the tax rolls. A total of 58 of the trusts paid taxes of some form for some or all of their lands, with $1.5 million in tax or PILOT payments made in 2024.

While land trusts can be exempted from paying property taxes, Devine says, "We understand we should pay some taxes." MCHT, when it applies for tax exemption, makes payments within 10% to 30% of the full tax rate, which is often more than if the land was in the open-space category, according to Devine. In Lubec, MCHT lands are in the open-space category, and thus property taxes are paid on the acreage, although at a reduced rate. However, for long-term sustainability, land trusts may not be able to pay the full tax rate. She says they should qualify for a reduced tax rate as they are providing services that otherwise the government would have to provide, such as access to land or the water.

Witham observes, "The building of relationships between municipal officials and conservation organizations is important. I encourage both to reach out to each other and look at ways conservation tools can bring in resources to communities."