News Feature

Originally published in Island Ad-Vantages, April 11, 2019
Split board gives trust tax exemption

by Rich Hewitt

How much is enough?

That was the question selectmen had for the Island Heritage Trust as the board granted the trust a tax exemption on two properties the organization recently acquired. The split decision—two selectmen declined to sign the exemption papers—took more than $100,000 assessed value off the tax rolls and raised renewed concerns about the impact of conservation efforts on the local tax base.

Selectman Evelyn Duncan had raised the question at a previous meeting, and she pressed Trust President Woody Osborn and Executive Director Paul Miller about the trust’s activities on the island. According to Duncan, a review of the tax rolls in Deer Isle and Stonington shows that the trust owns about 500 acres in Deer Isle and about 185 acres in Stonington, not counting the 800 acres it manages in conservation easements.

“That’s more than 1,400 acres. That makes Island Heritage Trust the biggest landowner on the island,” she said. “All of which is not taxable.”

She added that every time the trust acquires another property, it comes off the tax rolls and every other property taxpayer in town has to cover the lost tax revenue.

Although some IHT properties—such as the Lily Pond—are popular spots and are used regularly by the public, Duncan said that many properties are “just sitting there.”

“They’re not developed and they’re not used actively by the public,” she said.

She asked how much more land the trust intended to acquire on the island and at what point will they stop.

Miller indicated that IHT does not have an acreage goal, but assesses potential properties based on their conservation values—special features that are worth preserving.

Osborn added that the trust has tried to get the community involved in what they do.

While IHT does not pay taxes, Miller said that it does provide a payment to the town in lieu of taxes. He said they provide the recommended 5 percent and add another 10 percent onto that.

Duncan said the payment is a fraction of what the town would receive if the trust paid based on the full tax value of its properties. The nine properties IHT owns in Stonington are assessed at more than $2 million. The property tax on that value would have been more than $32,000 last year, she said. The total the town received from all nonprofits, including IHT, that make a payment in lieu of taxes was around $2,400, a difference of almost $30,000.

Selectman John Steed was generally supportive of the trust, noting that he appreciated walking on trust properties and that those properties will be protected in the future. He also said the trust meets all of the qualifications for tax exempt status.

Town Manager Kathleen Billings argued that the combined effect of trust ownership and conservation easements were placing a burden on the town which already is struggling with a flat valuation due to a dearth of new development in town. Although properties with conservation easements remain taxable, their assessed value is reduced which reduces the amount the property owner pays on his or her tax bill. And, Billings said, that deduction stays with the property even if it is sold, so the tax loss to the town continues.

“We’re struggling to figure out who to put the tax burden on,” she said adding “how much property do you save?”

Miller said he appreciated the town’s position regarding its tax base, he added that there is a value in preserving natural areas. “How do you quantify that?” he said. “There is value in conservation, in preserving habitat and clean air and clean water.”

Selectman John Robbins asked if the trust would ever consider accepting a parcel and developing it for housing.

Miller noted that IHT already is working with the Island Workforce Housing group and could in the future provide some expertise in that area.

Duncan urged the trust to consider the taxpayer looking at a potential property and to come to selectmen and talk about what they intend to do with it. Miller agreed it would be valuable for the trust to work with the town.

The discussion continued among selectmen later in the meeting when it was time to sign the exemption paper. Brewer and Robbins declined to sign.