Conservation easements help protect way of life in Colorado
Editor’s Note: House Bill 1197, which would reduce the amount of state money available for state tax credits for conservation easements over the next three years, has passed the House and is awaiting final action in the Colorado Senate.
The measure is aimed at helping Colorado deal with its budget crisis, and it caps total state spending on tax credits for conservation easements over the next three years at $26 million. It does not affect easements created before Jan. 1, 2011.
Swarthout’s group is not opposing the legislation.
”Saving the program at half its present value is better than not having the program. And that’s essentially what we’ve agreed to,” he said.
Far from the Capitol, tucked away in the vastness of Colorado’s rural landscape, are the faces that represent Colorado’s conservation easement tax credit program. They are the families that keep Colorado agriculture alive, giving up millions of dollars in land development income to conserve and protect the land and their way of life.
Conservation easements are the primary land preservation tool in Colorado, accounting for more than two-thirds of all conserved land in the state. They have been used to protect from development over a million and a half acres of land across Colorado.
Through this innovative program, private landowners give up the right to develop their land in exchange for a state tax credit, worth about 50 percent of the value of their land.
Since most of the landowners who put their land under easement do not make enough annual income to need a big tax credit, many choose to sell their tax credit for around 85 percent of its worth to someone who can use it. After legal and consultation fees, the money that most landowners end up in their pockets is worth around a quarter of their land’s value.
One might wonder why so many landowners — around 3,000 — have chosen to participate in a program that would yield them just a fraction of the income they would get if they sold their land off for development. A visit to one of the many Colorado farming and ranching families who have put their land under conservation easement makes it clear why this program is not only worth it for the landowners, but also is essential to Colorado’s heritage and economy.
Penny Kelly, owner of Ute Valley Ranch in Glade Park, is not a cautious woman. She once attempted to chase away a coyote in her bathrobe. She also answered an ad in the local paper that read, “Wife wanted.” It was through this act of bravery that she met and married Allen Kelly, a life-long rancher and owner of the Ute Valley Ranch.
For many years, life out on the range was a struggle. Until 1993, the family lived without electricity or running water, using outhouses and fuel lanterns. The Kelly men chiseled a channel in the rim rock to catch rain water and used the giant potholes in the canyon rim as bathtubs.
In 2003, Allen passed away, and Penny discovered that he hadn’t drafted a will.
“I actively pursued getting an easement for three years and finally obtained one in 2005. By then, however, I had incurred some pretty steep attorney fees, so I was still $35,000 short of paying off the loans I had taken out to begin this process,” said Kelly. “By good fortune, and a lot of saving, I was able to pay off that money within the year.”
The conservation easement tax credits allow families throughout the state to keep their heritage and their way of life intact, but the program offers much more to Colorado.
At this point in our state’s history, farmland and ranchland cannot be created — only destroyed.
Because of our state’s dependence on its rugged landscape for tourism, recreation and food, preserving these private lands is essential to maintaining a viable state economy.
Those who look for the “locally grown” signs in supermarkets will start to see these signs disappear if ranchland and farmland is irreversibly destroyed as a result of the elimination of this important conservation tool.
It behooves all of us to support what little incentive we can offer families in our state to maintain ties to this important tradition and way of life.
John Swartout is the executive director of the Colorado Coalition of Land Trusts and former executive director for Great Outdoors Colorado.