By PETER HIRSCHFELD Vermont Press Bureau

MONTPELIER – A proposal to cut funds for a program credited with preserving millions of acres of forest and farm land from development drew a blistering rebuke from the logging industry Thursday.

Lawmakers have committed to finding $1.6 million in savings in Vermont's Current Use program, a 30-year-old initiative that dramatically lowers taxes on tracts of land used for agriculture and forestry. A proposal drafted by a broad coalition of conservation-oriented organizations – including the Vermont Land Trust, Vermont Farm Bureau, Vermont Natural Resources Council and Vermont Nature Conservancy – would deliver those savings in the fiscal year 2011 budget.

But Ed Larson, executive director of the Vermont Forest Products Association, said the proposed cuts would devastate a program he credits with single-handedly propping up the state's timber industry.

"I'm going to be standing on the railroad tracks of this train trying to stop it," Larson told the House Committee on Ways and Means Thursday. "This is nuts. Why are you doing this?"

Lawmakers are doing this, they said, to ensure a balanced, responsible set of budget reductions that will spread out the impact of shortfalls in the fiscal year 2011 spending plan. As elected officials take the scissors to government programs, they said, Current Use needs to share in the sacrifice.

"The most important thing is the contribution this program is going to make to our (budget) problems," said Rep. Michael Obuchowski, a Rockingham Democrat and chairman of the House Committee on Ways and Means.

Larson's group isn't the only contingent opposing the coalition's proposal. Members of the Douglas Administration Thursday issued their objections to the plan, calling it a hastily conceived measure that could have severe unintended consequences.

Secretary of Natural Resources Jonathan Wood, himself a former forester, said he's willing to consider some of the options in the proposal, but that his agency needs more time to find out how the changes would

affect participating landowners.

"I believe this is the most successful conservation program in the history of Vermont," Wood said. "… We do not support the taking of $1.6 million from this program at this time."

Rather than move ahead with the coalition's proposal, Wood said, he'd prefer a one-year moratorium on new entries into the Current Use program, a plan he said would save the state an estimated $1.5 million in fiscal year 2012.

The coalition's proposal, drafted over the summer and fall by an ad hoc study committee, finds savings through a combination of program revisions. A controversial part of the plan would increase the so-called "dwelling exclusion" from two acres to five acres. For people with homes on current-use land, the change would see them pay fair-market value on the first five acres, instead of the first two. The provision excludes people who derive at least 50 percent of their gross income from either farming or logging activities.

Larson said the proposal unfairly targets loggers, since few Current Use beneficiaries whose parcels qualify as forest land actually derive any income from that land. Larson said his organization's membership worries that tinkering with Current Use would compel those landowners to withdraw from the program, and decrease the number of usable acreage available to logging professionals.

"We can't afford to lose another acre," Larson said.

The program, which has helped preserve more than 2 million acres for agriculture and forestry operations in Vermont, costs the state about $10 million annually. The money goes to reimburse municipal governments for foregone tax revenue due to the lower property valuations of land taxed at use, not development value. Some say those lower valuations also cost Vermont an additional $35 million in foregone revenue to the state's education fund.

Wood said the program is a backbone of the agriculture and forestry industries in Vermont. Without Current Use, he said, high property taxes would ruin the financial viability of farming and forestry, and risk the economic and cultural assets those industries support.

"Agriculture and forestry are huge economic drivers, even in a down economic cycle," Wood said. "I worry tremendously that the erosion of this program in any way will hamper that."

Obuchowski said his committee isn't committed to the coalition's proposal, but that he is determined to find savings for the 2011 budget.