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    Costs and Financing Options for the North Carolina Million Acres Initiative
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In 2000, the NC General Assembly enacted a commitment to protect an additional one million acres of North Carolina as dedicated open space over a ten-year period. The EFC analyzed the extent to which conservation lands are already being acquired in the state, the estimated gap in between present rates of protection and the million acre goal, the estimated costs of filling this gap, including costs to local government in potential lost tax revenue, and some of the possible financing options to pay the costs of filling this gap. Below is a summary of the report.

“The State of North Carolina shall encourage, facilitate, plan, coordinate, and support appropriate federal, State, local, and private land protection efforts so that an additional one million acres of farmland, open space, and conservation lands in the State are permanently protected by December 31, 2009. These lands shall be protected by acquisition in fee simple or by acquisition of perpetual conservation easements by public conservation organizations or by private entities that are organized to receive and administer lands for conservation purposes.”

* S.L. 2000-23, codified at N.C. General Statutes § 113A-241.

Amount of land currently being protected:

  • At present funding levels between 43,000 and 63,000 acres per year of North Carolina lands are being protected in ways that meet the Million Acre Mandate (G.S. § 133A-240, 241).
  • There is thus a gap of an additional 37,000 to 57,000 acres per year that must be protected over the next ten years.
  • Recent trends show relative contributions to land protection (in acreage) by: federal agencies (20%), State agencies (46%), local governments (12%) and nonprofit land trusts (22%).
  • Current ownership of protected lands (including conservation easements) is: federal (72%), State (19%), local governments (5%) and land trusts (4%).
    The local government ownership and acquisition data are the least certain and may be understated.
Table 2-2. Estimated Combined Fee and Easement Acre Acquisitions Annually Based on Recent Trends
  Acres Percent
Federal Agencies 10,000 20%
State Agencies 23,000 46%
Local Governments 6,000 12%
Non-profit Land Trusts 11,000 22%
     
Total 50,000 100%

 

Costs of funding "the gap" above existing funding levels :

  • Total additional costs required to meet the Million Acre Mandate, over and above present funding levels, will range from $95 million per year to $270 million per year, with a reasonable point estimate of $125 million per year, for the next ten years.
  • Costs of funding the gap in land acquisition include pre-acquisition, acquisition, and post-acquisition costs. It is important that pre-acquisition support (funding, staffing and land trust services) be provided to ease burdens on potential land donors and to facilitate state and local property acquisition processes. It is also important that adequate provision be made for post-acquisition stewardship, lest "protection" actually lead to degraded properties.

Local Fiscal Impact:

  • Permanent protection of land for conservation purposes can create both costs (lost tax revenue) and benefits (increased values for nearby properties; recreational and other amenities) for local governments.
  • The federal government provides payments in lieu of taxes for most properties it places into conservation status; the state of North Carolina does not provide payments in lieu of taxes.
  • The maximum estimated county property tax revenue loss (without considering any offsetting gains in property values) from state acquisition of the entire one million acres of conservation property is $9 million. The most likely real extent of county property tax losses from completion of the Million Acre Plan is much lower.

Revenue Options:

  • Key goals and criteria for million acre funding options are predictability, efficiency (maximizing benefits and reducing costs), and equity (matching who pays and who benefits over time and space, and being fair with respect to income differentials).
  • There are options for million acres funding from all possible financing sources, including debt, taxes, tax expenditure reduction, fees and others.
  • A summary of funding options and their evaluation is provided at page 44.

Further Research and Implementation:

  • The State should provide administrative funding to coordinate open space planning and tracking.
  • The maximum benefits from land preservation will only occur if acquisitions are made in conjunction with some coordinated planning.
  • There is no need for new bureaucratic structures to administer funding.