Our mid-fiscal-year property tax bill just arrived from the town of Oak Bluffs, reminding me that while I don’t actually enjoy paying them, I regard the basic idea of taxes as a good one. Governmental functions, from snow plowing to schools to national defense, are generally things I value and would not like to have to take care of myself.
But viewed from the Wild Side, the basis of our property tax system seems peculiar. We are taxed (roughly) on the financial value of our property – a transient and purely artificial figure. The Wild Side often thinks about another way to define value, based on the notion that the Island itself, and not the marketability of our property, represents our real wealth. The Island’s ecosystem does a great deal for us that doesn’t register in our financial system: our land and natural systems provide fresh water, support harvestable deer, fish, and shellfish populations, pollinate crops, keep soil fertile, and offer scenery and recreation that we can enjoy and that tens of thousands of visitors spend millions of dollars every year to share. How might a property tax system be designed to encourage wise, long-term care for this irreplaceable resource that represents our collective future?
I’m a naturalist, not an economist, and by some inexplicable oversight, I haven’t been granted the power to levy taxes. So I offer this scheme simply as a “thought experiment.” But let’s assume that every square foot of the Island can potentially make the same contribution to the Island’s ecologic health (probably not true, but every tax system needs some simplifying assumptions). Instead of a tax rate of X many dollars per $1,000 in assessed value, towns would assign a rate per square foot. The Wild Side tax scheme, in other words, is concerned with how much of the Island you have control of, rather than how much you could sell that land for.
But different land uses have different implications for the long-term health of our community’s natural resources. So for each parcel, we will adjust the tax rate through a system of deductions and surcharges, based on whether the prevailing land use of a particular square foot fosters or degrades the Island’s environmental health.
Houses, which replace wildlife habitat, consume energy, and are associated with nutrient inputs into the groundwater, obviously merit a surcharge, based on the size of the house but adjusted for factors like energy efficiency or septic system design. Emerald-green lawn, consisting of biologically useless exotic plants and supported by fertilizer input and supplemental water, would merit an additional surcharge; native-plant landscaping or unimproved “Vineyard lawns” would earn a modest deduction. Treated most positively would be land maintained in its native state, filtering rainwater into our aquifer, supporting biodiversity, and maintaining the scenic landscape that benefits us all.
The approach of taxing land use rather than land value may seem off the wall, but other aspects of our tax system (like income tax credits for renewable energy) already encourage practices that are deemed constructive. And it is already possible to reduce your property taxes by reducing a property’s value through a permanent conservation restriction. The Wild Side tax scheme simply offers a more direct approach.
Moreover, the Wild Side scheme could facilitate a kind of economic fairness. A 1998 analysis by economist Leah Smith determined that, for West Tisbury at least, conservation land saves town costs in the long run: tax revenue generated by a parcel is reduced or eliminated by conservation protection, but the parcel will not require costly, ongoing, municipal services – schools, road maintenance, police, social services – in the future. The Wild Side tax system would make it easier to draw revenue from properties on which funds are actually spent, while making it possible to penalize or reward hidden costs and benefits that are totally ignored by our current value-based tax system.
I’m sure my scheme is totally unworkable. It would be hard to keep the Wild Side system from being regressive, benefitting large landholders and penalizing the poorest members of our community. Both its development and its administration would be complicated, expensive, and, politically, incredibly messy. And by removing existing tax incentives to put land into permanent conservation protection, it might complicate effective conservation over the long run.
But the basic idea – adjusting property taxes based on how land uses affect natural resources we hold in common – might offer a useful refinement to our existing tax system, providing an incentive for making decisions that benefit us all. And as an exercise in thinking about our own plans for the new year, perhaps it’s a question worth asking: how would you fare under the Wild Side Tax, and what could you do to reduce your tax burden by sustaining rather than stressing the Island?