Md. Faces Shortfall for Land Purchases
$100 Million Less by Fiscal 2010 Is Predicted
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Thursday, December 4, 2008
Maryland's budget for land preservation is expected to plummet dramatically in the next few years, making it more difficult for the state to preserve undeveloped land, according to testimony given recently before a legislative subcommittee in Annapolis.
The Department of Natural Resources and the Department of Agriculture, the two agencies primarily responsible for buying undeveloped land, expect to have $100 million less in their budgets by fiscal 2010.
"We have to acknowledge . . . that we don't have the funding," said Shaun Fenlon, director of the Land Acquisition and Planning Unit of the Department of Natural Resources.
James Conrad, executive director of the Maryland Agricultural Land Preservation Foundation, which is part of the Department of Agriculture, said the weak real estate market is to blame for the decline in funding. The state derives most of its land acquisition revenue from real estate and agricultural transfer taxes. It then buys land rights to limit development of agricultural areas.
Conrad told the Joint Subcommittee on Program Open Space and Agricultural Land Preservation that the foundation overspent last year, based on overly optimistic tax revenue projections.
"That was when the bottom opened in the real estate market," he said.
With housing prices and sales dropping, last year's revenue fell about $30 million short of the $91 million that the foundation spent, Conrad said. As a result, it must pay the difference by 2010, he said.
The Department of Natural Resources faces a similar funding shortfall.
The legislative panel also received some good news about land preservation. Because real estate prices are down, landowners are more inclined to sell to the state.
"When the real estate market is hot, we have money, but people are not as anxious to put their property in [to preservation], and what we get is expensive," Conrad said. "When the real estate market is cool, we don't have money, and people are anxious to put their properties in."
In addition, land prices have fallen to an average of $4,500 per acre, down from almost $6,000 last year.
"We can still be very successful, because I don't see the real estate markets changing in the next couple of years," Fenlon said.
