LCHIP's Time Has Come

April 2, 2007

Jack Savage, VP for Communications & Outreach
Society for the Protection of New Hampshire Forests
(603) 224-9945, ext. 330;

LCHIP’s Time Has Come

By Jeffrey D. Gilbert

Next week the New Hampshire House will complete its work on the state’s next two year budget. A key item in the proposed budget is a dedicated funding source for the Land and Community Heritage Investment Program (LCHIP), through a 4% surcharge on the state’s real estate transfer tax. As a member of New Hampshire’s real estate community, and as a former legislator, I urge the House to include this proposal in their version of the budget.

During my time in the legislature, I had the privilege to serve as vice chair of the Ways and Means Committee. I heard many proposals to create dedicated funds for myriad programs of state government. In most cases I did not support these proposals because they did not meet three key tests: First, was the program of long-term importance to the state? Second, was the program well-managed? Third, was there a logical connection between the program and the proposed funding source? Funding LCHIP with a portion of the real estate transfer tax clearly meets all three of these tests.

First, LCHIP is by definition a long-term investment in the state’s environmental health and quality of life. It protects lands and historic assets that will otherwise be lost forever, and provides critical equity that makes projects happen where they otherwise would not. LCHIP is an investment in the essence of what makes New Hampshire unique, not just for today, but for generations to come.

Second, the program is well-managed. Despite inadequate funding, the program has funded 129 conservation projects throughout New Hampshire that have conserved more than 200,000 acres of land, and preserved and revitalized 87 historic structures. For every state dollar the program has invested, LCHIP has leveraged nearly six dollars from other private, federal and municipal sources. It has done all this with a staff of four, while similar programs in other states have 9-13 staff members.

Third, there is a clear nexus between LCHIP and the proposed funding source. Tying funding for LCHIP to real estate activity ensures that in periods of rapid growth and development, funding for conservation will be proportionate to the need. This is why a dozen states already allocate some portion of their real estate transfer tax to conservation, dedicating anywhere from 5% to 100% of the revenues to conservation. The proposed LCHIP surcharge would dedicate just 4% of New Hampshire’s transfer tax to conservation.

There is also a certain historic justice in using a portion of the real estate transfer tax for LCHIP. New Hampshire’s transfer tax was established in 1978 to fund conservation easements on agricultural land, but was re-directed by the state legislature to the general fund just two years later. The proposed LCHIP surcharge would return a modest portion of the transfer tax to the purpose for which it was originally intended.

Opponents have claimed the surcharge would negatively affect housing affordability in New Hampshire. It would not. The proposed fee would increase total closing costs on the median New Hampshire home purchase by less than one percent, or $75 each for the buyer and seller of a $250,000 home. Experts at the New Hampshire Housing Finance Authority agree that in and of itself the surcharge is too small to prevent low to moderate income homebuyers from accessing the market.

From the beginning, the New Hampshire legislature intended LCHIP to be a consistent, long-term investment in conserving the natural and historic resources of New Hampshire. The bipartisan commission that recommended the creation of LCHIP in 1999 proposed funding from a dedicated source. After years of struggling to fund LCHIP, the state legislature has the opportunity to finally secure the future of this effective and popular program. This is the year – let’s get it done.

Jeffrey D. Gilbert is a partner in WJP Development, LLC, a commercial real estate development company, and a former vice chair of the N.H. House Ways and Means Committee.