hearts and minds

August 6, 2006

Wetlands Protection on Wisconsin Farms

“When you’re up to your armpits in alligators, it’s easy to forget you came here to drain the swamp.” This familiar old aphorism is out of date. They’re not swamps anymore. They’re “wetlands”. And you ain’t s’posed to be draining ‘em, anyhow.

Wetlands are now considered “useful” just like they are. They mitigate floods and prevent damage. (Wetlands that used to exist along the Gulf Coast would have prevented much of the catastrophic effect of the storm surge precipitated by Katrina.) They help recharge groundwater aquifers that would otherwise become depleted. Wetlands clean surface water of biodegradable nutrients, and partially mitigate (by containment) persistent chemical pollutants. Retained wetlands prevent excessive erosion and the consequent topsoil loss and downstream sediment loads. Swamps, potholes, marshes, bogs, and fens, are critically important wildlife habitat, especially as “nurseries” and sources of food and shelter for virtually every plant and critter in the entire food chain. For both adults and kids who love nature, these natural wetlands are wellsprings of beauty, joy, knowledge, and inspiration, and the indispensable source of the fish and game that connect many of us to our ancient pre-industrial, pre-agricultural, roots.

This report is about the unfortunate, unintended interaction and inherent contradiction between two government policies, or their administration, in Wisconsin. This interaction acts to defeat the intention of both policies, and it fleeces the average taxpaying citizen in the process.

The first policy is the Wisconsin Farm Use-Value Law, the purpose of which is to slow or prevent the rapid loss of farms in Wisconsin by taxing farmland for its value as farmland, not for its value in some other use, such as a residential subdivision, shopping center, or theme park. An important rationale behind this law was that farmland as a whole is the only developed property that paid substantially more in taxes than it used in government services. The motivation for the law was that taxing farm land for its value in some other hypothetical use would inevitably and quickly force it’s loss as farm land when development moved into an area, simply because no one could afford to pay the escalating taxes while continuing to farm it.

The second policy is represented by the federal and state Conservation Reserve Enhancement Program. Their purpose is to encourage the restoration, retention, and protection of wetlands and of stream and lake (riparian) buffers on farms. These features are of marginal economic value as farmland, but financial pressures often make it necessary to keep them in productive service as pasture or cropland. These various government programs encourage farm owners to restore and protect these ecologically significant features by providing incentives to take them out of agricultural production.

A tricky thing in Wisconsin’s farm use-value law is that only portions of the farm that the assessor feels are currently in actual use to grow crops or as pasture are assessed for farm use value. Other portions of the farm, such as rock outcrops, wood lots, or swamps, potholes, stream and lake banks, are considered to be land “not in agricultural use”, and assessed for their “market value” in some use other than as part of the farm.

If your farm is not currently in the sights of the developers, those wetlands and riparian buffers among your cultivated fields (not to mention the woodlot holding old growth oak, tamarack, white pine, beech, or maple) will have a market value which you may be able to bear with your farming income. But if the developers are salivating for your farm, the taxes on those bogs and potholes and stream buffer strips that you can’t farm, and that you can’t sell even if you wanted to, will skyrocket beyond belief. Currently, the actual taxes per acre on wooded riparian buffers between plowed fields in some regions have risen to 25 times their use-value taxation if they were used as pasture.

Consider an actual 95-acre farm parcel, with no improvements, with 65 acres tillable, and 30 acres of pasture that, due to cessation of dairy cattle pasturing, has become restored wetlands and riparian buffers. The 30 acres of wetlands and buffers use absolutely no government services, and actually provide important environmental services. Yet those 30 acres currently cost more than twice as much, in taxes, as all 65 acres of tillable, productive cropland cost. If those 30 acres were put back in pasture, the taxes on them would be reduced to one-eighth of the total taxes on the adjacent 65 tillable acres, instead of twice as much.

Only the federal and state CREP and CRP wetlands and riparian buffer protection programs qualify for use-value taxation in Wisconsin. Unfortunately, other valuable programs, such as the Wetlands Reserve Program, are not on the qualifying list. If a farm owner takes land out of production and enrolls it in the Wetlands Reserve Program, those acres will be subject to unlimited increases in taxes, depending solely on how badly developers want to get the farm. A farm owner who has chosen to voluntarily protect wetlands and riparian buffers, or who did so before the CREP program was even a gleam in the guvmint’s eye, will also be subject to those unlimited future tax increases.

The most appalling Catch-22 is that farmers who have protected wetlands and buffers voluntarily, at no cost to taxpayers, cannot later enroll those wetlands and buffers in the qualifying CREP program. And the reason is that the farmer is already doing exactly what the government wants him to do. So the farm owner who voluntarily protects wetlands and streams gets double whacked. He doesn’t get any annual subsidies. But even worse, he gets taxed 25 times what the guy collecting the subsidies gets taxed.

What’s the solution for this farm owner’s frustration? Either sell the whole farm to developers. Or (if it is still feasible) tear up the buffers, repair the fences, and run the cows there again. If he does that, ironically, after several years he can qualify for enrollment in the CREP program and collect the annual payments for taking that farmland out of production. And, of course, that way he will also retain the use-value taxation, and thus save the farm.

That’s what I mean by an unfortunate interaction between two government policies that are administered in a way that defeats the intent of both policies. And it’s a pretty ridiculous example of the federal and state governments punishing, with both hands, a conscientious farm owner for doing, at no cost to taxpayers, exactly what the government would gladly pay another farmer to do.

Of course, another option would be for the government to fix this mistake. Not a bad idea. The future results of not doing so are both ominous and insidious for wetlands and riparian buffer protection on Wisconsin farms, and for the protection of those farms themselves.

May 18, 2006 (Refer to http://www.wiscwetlands.org/taxes.htm. See also “Wisconsin Conservation Congress Advisory Question“)


  1. Thanks very much for your essay. The current tax laws regarding conservation lands are certainly absurd, and the River Alliance agrees they must be changed. As you know, the Wisconsin Wetlands Association is taking the lead on working with DOR to revise Tax 18, the rule currently impeding your attempts to be taxed fairly for your preservation efforts. We’re grateful WWA is working on the details – Erin O’Brien is experienced in the nuances of code development and very knowledgeable about the issue. The community of statewide conservation organizations typically work together on these issues, with one group taking the lead and the others jumping into the fray when it’s time to send letters of support and organize our members in support. This is the only way we can track and influence the myriad environmental issues we all care about, as well as the bad pieces of legislation that seem to crop up on a daily basis.

    I just checked in with Erin, and it sounds like the effort to revise Tax 18 is moving, albeit slowly. We wrote a letter in support of changing the code to allow for fair taxation on protected riparian areas last spring, discuss the details regularly with Erin, and will step up our efforts once proposed code language is developed and forwarded for approval by the legislature. The information in your letter is so compelling, I hope you don’t mind if I end up using a bit of it in our future letters of support!

    Comment by Lori — February 16, 2007 @ 5:59 pm | Reply

  2. […] This Resolution regarding wetlands protection on farms appeared on the printed ballot at the 2006 statewide Wisconsin Conservation Congress meeting […]

    Pingback by Wisconsin Conservation Congress Advisory Question « hearts and minds — March 12, 2008 @ 6:16 pm | Reply

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