Introduction
With development outpacing conservation in the majority
of states, rapid population growth, and dwindling federal
conservation dollars, state efforts to curb sprawl and conserve
natural resources are all the more critical. Many states
have created innovative land use policies in an effort to
save taxpayer dollars while managing growth and preserving
invaluable watersheds habitats and ecosystems. New Jersey’s
“Smart Growth Tax Credit Act” is one example
of such a policy. Under the legislation, builders get a
tax break for developing in areas earmarked for growth in
the state plan. Further tax breaks are awarded for developers
who meet green building standards that save energy and natural
resources. The tax revenue lost from the initial breaks
will be compensated for by money the government saves by
not extending new infrastructure and essential services
to sprawling subdivisions. Additional tax revenue will be
generated in the future by tenants occupying energy-efficient
green buildings – the energy savings translates into
higher taxable income. The key to the success of a smart
growth tax credit program is for states to have development
and redevelopment plans that channel growth into urban and
suburban areas that are already built up. Without this sort
of guidance, the purpose of the credit becomes lost.
State Actions
New Jersey
The “Smart
Growth Tax Credit Act” (2004 S 274) proposes giving
builders a tax break for developing in areas earmarked for
growth in the New Jersey Development and Redevelopment Plan,
and for meeting green building standards. The tax breaks
are scaled – for example, builders get bigger breaks
for developing in areas that are the most densely populated
or have the best access to public transit, or for exceeding
green building standards.
S
265 (2004) encourages Consistency of Municipal Planning
Documents with the State Development and Redevelopment Plan.
If it becomes law, SB 265 will help ensure the success of
the Smart Growth Tax Credit Act. It allows towns to rewrite
zoning maps and direct building into key areas according
to the New Jersey State Development and Redevelopment Plan.
It would also keep farms and other open land from being
paved over, and would allow towns to concentrate roads,
schools, and water lines in areas earmarked for development.
By limiting water lines, sewer hookups, and roads, towns
could halt development in open areas.
Maryland
The Heritage
Preservation Tax Credit focuses on encouraging heritage
preservation as a means of perpetuating smart growth. It
has successfully encouraged rehabilitation in Maryland since
1996, and can be credited with creating jobs and expanding
tax income for the state. In 2000 and 2001, $39 million
worth of tax credits granted by the state spurred $155 million
worth of private investment in existing urban areas, resulting
in $20 million in new revenue for the state.(1)
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