Raymond Voter Information Project

Article 14

LUCT Revenue Allocation Change

Text of 2011 Town Warrant Article 14

Article 14 was amended at the Town Deliberative session on 5 February 2011 to include text identifying
the proposed change in distribution of LUCT monies. Refer to the warrant article for the complete text.

A land use change tax (LUCT) is collected only when undeveloped forest or farm land is taken out of its “current use” and developed.¹ Raymond’s current allocation, established by voters in 2005 and 2008, is 50% of any LUCT revenue to the Conservation Fund,² 21.4% to the Capital Reserve Fund (CRF),³ and 28.6% to the General Fund. This article asks voters to change Raymond’s allocation of any future LUCT revenue, sending 100% to the General Fund. This article does not affect LUCT funds currently in the Conservation Fund.

A YES vote increases future LUCT allocations to the General Fund, and eliminates future LUCT allocations to the Conservation Fund and the Capital Reserves Fund.

A NO vote maintains the current allocation of future LUCT revenue.

Reasons why some voters might vote yes:

• To increase revenue available in the General Fund for town expenses or tax reduction during years when LUCT is collected.
• To eliminate direct funding for conservation and the Capital Reserve Fund.
• To require Raise and Appropriate warrant article(s) to fund conservation land purchases once the current fund is exhausted.

Reasons why some voters might vote no:

• Loss of the primary source of revenue to the Conservation Fund, which allows the Conservation Commission to accumulate funds to fulfill its mission.⁴
• Once the current conservation fund is depleted, Raymond's conservation needs must be met out of revenue raised from a special warrant article, with direct impact to property taxes, rather than out of LUCT revenue paid by developers.
• Loss of revenue to supplement the Capital Improvement Plan budgeted revenue for Capital Reserve Funds.
• Limits opportunity, once current fund is exhausted, for the town to bid on land needed to preserve natural resources at the time land becomes available for sale, or to negotiate with landowners who want to complete their sale prior to the next town vote.⁵

References:

1. RSA 79.A:7 The LUCT assessment is 10% of the fair market value of the undeveloped land. The Current Use tax incentive was created in 1972 to encourage preservation of open space; when land is taken out of current use and open space is lost, LUCT revenue can enable towns to acquire other open space to preserve rural character. (NH Association of Conservation Commissions)
2. The Raymond Conservation Fund was established by voters in 1990 pursuant to RSA 36-A:5 to replace Raymond’s Conservation Capital Reserve Fund. (1990 Town of Raymond Annual Report).
3. The Capital Reserves Fund (CRF) is a savings account for the future purchase of high cost items that might otherwise cause a tax spike in the year they are purchased. Example: firetruck.
4. RSA 36-A:2 Purpose of a Conservation Commission: “for the proper utilization and protection of the [town’s] natural resources and for the protection of [the town’s] watershed resources.”
5. Voters have adjusted LUCT (and Timber Transfer tax) allocations between the Conservation Fund and the General Fund over the years. The dollar amount distribution has also varied depending on development activity in Raymond. For example:
   • In 2004 LUCT revenue reached a high of $195,000 and voters had allocated 100% to the Conservation Fund.
   • In 2005, LUCT revenue dropped to $40,375 and voters had allocated 30% ($12,112) to the Conservation Fund.
   • In 2010, LUCT revenue was $6,414 and voters allocated 50% ($3,207) to the Conservation Fund, 28.6% to the General Fund ($1834), and 21.6% to the CRF ($1373).

   Note: LUCT revenue is not available every year.

Please send questions/comments to editor@raymondvip.org

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