EDITORIAL
More than 25 years ago, the U.S. Internal Revenue Service began allowing federal income tax deductions for donations of conservation easements to protect open space. Since then, more than 9 million acres have been preserved across the nation with this conservation tool.
Many of these preserved lands are in the Garden State and include wetlands, farmland, forests and native wildlife habitat.
But a recent report from the U.S. Congress’ nonpartisan Joint Committee on Taxation recommended cutting or eliminating tax benefits for the donation of both conservation easements and lands. The committee found the public benefits of easements to be "tenuous and speculative" and cited abuse of the tax breaks as justification for slashing them.
To be sure, there have been a few bad or improper conservation transactions or at the very least some that appear improper. But should the whole basket be thrown out because of a few bad apples?
Take a look at the role easements have come to play in land preservation. Over the past 40 years, conservation easements have become one of the most common tools for preserving land. With a conservation easement, landowners permanently sever and donate or sell the rights to develop their land. The landowners keep the land, which is now preserved in perpetuity. The agency or land trust holding the easement monitors the land to make sure activities are consistent with the easement and that the natural resource values of the land are preserved.
Easements generally cost less than buying the land outright, so they are attractive in areas like New Jersey where property values are so high. The tax benefits they provide if donated are big incentives for landowners considering donating conservation easements. It’s no wonder conservation easements have become so important to our efforts to preserve open space and farmland here in New Jersey.
The results of these tax benefits in New Jersey speak for themselves. Here are two small examples among thousands of such preservation successes that were accomplished with conservation easement tax breaks:
In December 1998, a couple donated an easement on their 113-acre property in West Milford, Passaic County, to the Morris Land Conservancy. The remote, forested property includes a stream, extensive wetlands and exceptional wildlife habitat. It is surrounded by more than 45,000 acres of Waywayanda State Park and City of Newark watershed lands.
In 1999, the conservancy donated the easement to the state of New Jersey. This land is now permanently preserved.
In the spring of 1999, the Hunterdon Land Trust Alliance entered into a partnership with the D&R Greenway Land Trust and the New Jersey Green Acres Program to protect the 36-acre historic Coryell Farm in Lambertville. The historic and environmentally significant property dates from 1750 and was formerly the estate of Cornelius Coryell, an aide to Gen. George Washington during the American Revolution.
By selling development rights on 34 of the 36 acres, the landowners obtained immediate cash. And since they accepted less than the market value, they were eligible for a charitable deduction from their income tax for the difference.
But we have lots of other examples involving outright donations of lands. And land donations would be affected too, since the Joint Committee on Taxation also recommended eliminating charitable deductions for the appreciated value of land donations. Landowners would only be able to deduct their "basis" in the land they donate, which is the price they paid to buy the land plus any capital improvements.
This recommendation, if implemented, would have a devastating impact on donations of conservation lands across the state.
Michele S. Byers is executive director of the New Jersey Conservation Foundation.

