iCan Use Value Assessment for Property Taxation of Agricultural Land Protect Environmental Amenities? Executive Summary

Retention of agricultural land is a principal goal for Michigan and its local governments. Local governments statewide are seeking options to stem losses of agricultural land. One option being widely consider is Purchase of Development Rights (PDR). This research assesses the willingness of residents in Kent County Michigan to support a PDR program and evaluates the relationship between amenity values associated with farmland and that support. While amenity values are important, with provision of local heritage the most identified amenity, the analysis report here does not show a significant relationship between demand for amenity values and willingness to support a PDR program. Cost is a significant factor, however. Michigan is the only state which does not have a preferential property tax assessment structure for agricultural land. Statistics show that Michigan farmers pay 50 % to 150 % more in property tax on agricultural land than do farmers in other midwest states. In theory, high property taxes make the cost of retaining land in agriculture higher, encouraging farmland owners to convert land from agriculture to other uses sooner than they might otherwise. However, results of research on preferential taxatio