By CHRISTOPHER CAREY
ANNAPOLIS (Oct. 22, 2008)—The state's budget for land preservation will plummet dramatically in the next few years, falling by more than $100 million by 2010, according to statistics released Tuesday at a meeting of the Maryland Joint Subcommittee on Program Open Space and Agricultural Land Preservation.
The loss of funds could make it more difficult for the state to purchase and preserve undeveloped land.
The projected loss of funds combines new estimates for fiscal year 2010 from the Department of Natural Resources and the Department of Agriculture, the two agencies most responsible for purchasing undeveloped land.
"We have to acknowledge ... that we don't have the funding," said Shaun Fenlon, director of the Department of Natural Resources Land Acquisition and Planning Unit.
James Conrad, executive director of the Maryland Agricultural Land Preservation Foundation, which is part of the Department of Agriculture, said the weak real estate market is to blame for the drop in funding.
The foundation, like the Department of Natural Resources, generates most of its land acquisition revenue from real estate and agricultural transfer taxes, and purchases land rights to limit development of agricultural areas.
Conrad said the reason the foundation is predicting lower funding in the next few years is because it has to repay excess spending from 2007.
"We overspent in 2007," said Conrad. "That was when the bottom opened in the real estate market."
The foundation expected $91 million in funding in 2007, but revenues for that year came up short by about $30 million, according to the foundation's statistics. This is because its budget is based on an estimate of what transfer taxes will be in future years.
The estimate for 2007, however, did not predict the housing crisis, and the foundation spent more than it actually had. As a result, it has to repay the difference in three years, which will be in 2010.
The Department of Natural Resources Land Acquisition and Planning Unit faces similar funding shortfalls.
Despite the bleak outlook, the meeting focused on ways that land preservation work could continue to move forward with success.
"Landowners are much more willing to talk to us," said Fenlon.
Fenlon pointed out that prices for undeveloped land have lowered recently, and that landowners have become more willing to sell to the state.
"When the real estate market is hot, we have money but people are not as anxious to put their property in, and what we get is expensive," said Conrad. "When the real estate market is cool, we don't have money and people are anxious to put their properties in."
In addition, the cost to purchase land has fallen to approximately $4,500 per acre, down from almost $6,000 last year.
"We can still be very successful, because I don't see the real estate markets changing in the next couple of years," said Fenlon.
Capital News Service contributed to this report.