Could a city's desire to preserve natural space end up costing taxpayers more or do harm to local schools?
The answer is yes.
What brought this to mind was Fayetteville's decision a few weeks back to acquire 230 undeveloped acres northwest of Interstate 49 and U.S. 62. City leaders acquired the land, which is within the city limits, as a major step toward ramping up Fayetteville's status as a mountain biking tourism magnet.
To borrow a phrase from "The Godfather," the Walton Family Foundation made the city an offer it couldn't refuse, only with financial enticements and not Luca Brasi. The foundation generously provided a grant for half the $3.3 million purchase, then offered city leaders a five-year, interest-free loan for the remainder that eased the acquisition's impact on annual budgets.
If I were on the City Council, my response would have also been "Where do we sign?"
It's not an unheard of type of acquisition in Fayetteville. Back in 2003, when nearly 70 acres of Mount Sequoyah went on the market, the city joined forces with the new Fayetteville Natural Heritage Association to buy the wooded acreage popular with city hikers. What an incredible natural asset. The association has also helped preserve natural space alongside Kessler Mountain Regional Park.
A few years ago, neighbors of undeveloped land known as the Brooks-Hummel property responded when it went on the market, hoping to prevent its development. With huge financial help from the nonprofit Natural Heritage Association, the city bought the property for $495,000 in 2007.
These lands are put into perpetual conservation easements assuring their preservation.
Fayetteville's admirable willingness to preserve natural areas now bubbles up when owners of undeveloped property decide it's time to cash in on their investments. Take the recent debate over a wooded area at the east end of Rolling Hills Drive. Landowners there rezoned 10 acres for residential and commercial development and want to rezone another 40 acres for development. The proposal fits Fayetteville's policy-driven desire to prevent sprawl and grow the city's population through in-fill development. It also would allow for the extension of Rolling Hills Drive eastward, making a stronger east-west connection for motorists.
Neighbors in the area are fighting the changes. And what was one suggestion? To preserve the land as "green space" like the city's new 230-acre venture. It's not the first time development plans have prompted adjacent residents to become convinced that someone else's property should become a nature preserve. One of neighbors in opposition just recently incorporated a group called Friends of Fayetteville Forests. Probably not coincidence.
Who doesn't love natural space? But there's another issue that must be considered in this push for preservation. Local schools rely on property taxes. Indeed, about 82 percent of property taxes paid goes to your local school district. Operation of the Fayetteville Public Library is funded through property taxes. But when those lands become city owned for public use, they drop off the tax rolls.
Consider this: Imagine how much tax revenue 230 acres would produce in the years ahead if it developed as residential or commercial properties. I spoke with the folks at the Washington County Assessors Office for some estimates, which are naturally very rough because they involve looking into a crystal ball as to future development. But keeping that in mind, wooded land near the city's new 230-acre property might be valued at $180 per acre as it is today. Residential development, depending on type, graduates that far beyond that, well into six-figure prices per acre. With commercial development, values really start to soar.
So, it's safe to say a decision to remove the property from the tax rolls eliminates tens, if not hundreds, of millions of dollars in future value on which annual taxes for schools, libraries, roads and government operations would be collected. Since the acreage within the city and school district is finite, that means every nature preserve reduces the volume of property on which taxes will be collected in the future.
Fayetteville already has a massive tax-sucking hole in its midst known as the University of Arkansas. The university generally doesn't pay property taxes. That's a big reason why 9.12 percent of land within Fayetteville produces no tax revenue for schools and such. In Springdale, that figure is 5.75 percent, made up of government property, churches and other tax-exempt entities.
So am I saying the city should never preserve natural spaces? No, but I bet the folks who balance the bottom line at the library and school district -- which do not get money directly from sales taxes, by the way -- sweat a little more each time a tax-exempt property is carved out. And taxpayers, perhaps, should sweat a little, too. The costs of operating schools and other public services don't generally get cheaper. Development helps to increase property values and tax revenue. When land is removed from taxation, that means those costs will be spread to other tax-producing properties.
Preserving nature isn't a one-time cost. It shifts more of the burden to fewer taxpayers. That, at the least, should be an ongoing concern for policymakers.
Commentary on 04/30/2018