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LAND USE, LAND, VALUE, TAXES, AND DEVELOPMENT

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Rural land in Alabama is valued ($1500-1900 per acre) about the ... 4. Pike. 4. Russell. 5. Chambers. 5. Clarke. County Median Family Income. Wilcox $22,200 ... – PowerPoint PPT presentation

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Title: LAND USE, LAND, VALUE, TAXES, AND DEVELOPMENT


1
LAND USE, LAND, VALUE, TAXES, AND DEVELOPMENT
2
Land Use, Value, and Taxes Main Points
  • Rural land in Alabama is valued (1500-1900 per
    acre) about the same as in Georgia and South
    Carolina, less than in Florida, more than in
    Kansas and Mississippi.
  • The value of land here does not come primarily
    from its use in agriculture or from its innate
    productivity.
  • Land in Alabama has held its value consistently,
    and is a good deal for investment.
  • Land taxes in Alabama are the second lowest in
    the nation, lower than all our regional
    neighbors.
  • Evaluation for land taxation is not done on the
    basis of current market value but on the basis of
    current use value. Current use evaluation
    results in a value of about 500 per acre.

3
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7
Alabama Land Values Over Time
  • The following slides come from Professor Walt
    Prevatt of Auburn University.
  • They show the changes in Alabama land values over
    time, in comparison to the region and to the
    country.

8
Farm Real Estate Values,Alabama, 1950-2003
9
Farm Real Estate Values,Alabama, 1950-2003
1Alabama Farm Real Estate Values were deflated
using the Gross Domestic Product Deflator,
1950100.
10
Annual Percent Change In Farm Real Estate
Values,Alabama, 1950-2003
11
Farm Real Estate Values,Alabama U.S., 1970-2003
12
Population Determines Rural Land Value
  • The following slides, also from Dr. Prevatt of
    Auburn, show what influences the value of
    agricultural land. The r2 indicates how
    strongly a factor influences land value.
  • The first two slides show that cotton prices and
    calf prices have almost no influence on land
    value. Productivity is not key.
  • The third slide shows that timber value accounts
    for about 35 of land value.
  • The fourth slide shows that population accounts
    for about 61 of land value (96 35 61).
  • Population has influence because of the demand
    for housing and other development. Land can be
    held for speculation because of the low tax.

13
Econometric Analysis Of Value
  • Cropland ValueCropland Value f ( Alabama
    Cotton Prices ) Cropland
    Value 1,362 - 525 CP
    R2 0.0693

14
Econometric Analysis Of Value
  • Pastureland ValuePastureland Value f (
    Alabama Calf Prices )
    Pastureland Value 937 0.5019 CP
    R2
    0.0009

15
Econometric Analysis Of Value
  • Timberland Value
  • Timberland Value f ( Alabama Timber Prices
    ) Timberland Value 9.2193
    30.3644 PP
    R2 0.3459

16
Econometric Analysis Of Value
  • Farm Real Estate Value (FREV)
  • FREV f ( Forestry Receipts Population)
    FREV -1234 2.85
    FR 39.01 POP
    R2 0.9617

17
Raising Taxes
  • Alabama land taxes are low. Low land taxes allow
    land to be held by speculators, by successful
    timber growers and farmers, by poor farmers, and
    by poor rural residents.
  • Raising taxes might gain some revenue for the
    state, and might cause the land to move.
  • Raising taxes might also adversely affect poor
    farmers and poor rural residents.
  • Land tax changes have to be part of a larger view
    about taxes and development.

18
Alabama Development Problems
  • The following sequence of slides comes from Dr.
    Sumners of Auburn University. It shows that the
    traditional development policy in Alabama has not
    worked.
  • The traditional development policy was low land
    taxes, little provided infrastructure, with a
    poor and undereducated work force (but hard
    working). This policy actually resulted in
  • High rural poverty
  • Poor education, including low test scores
  • No infrastructure development
  • Out migration
  • Break-down of the rural lifestyle
  • No Development

19
Economic Development Issues for Rural Alabama
Joe A. Sumners, Ph.D. Director Economic
Development Institute Auburn University 334-844-4
704 sumneja_at_auburn.edu
20
Alabama Rural Distress
  • County June 03 Unemployment
  • Washington 17.4
  • Wilcox 15.4
  • Lowndes 13.8
  • Dallas 13.7
  • Sumter 12.9
  • Greene 12.7
  • Bullock 12.5
  • Choctaw 12.0
  • Perry 11.7
  • Lamar 10.9
  • Hale 10.5
  • Butler 10.1
  • Randolph 10.0
  • County Over 65
  • Covington 17.9
  • Crenshaw 17.1
  • Tallapoosa 16.6
  • Clay 16.5
  • Henry 16.4
  • Geneva 16.3
  • Fayette 16.1
  • Etowah 16.0
  • Lamar 15.9
  • Randolph 15.9
  • 9. Cherokee 15.9

21
Alabama Rural Distress
  • Counties with Lowest SAT Scores
  • 1. Bullock
  • 1. Macon
  • 1. Perry
  • 1. Sumter
  • 2. Barbour
  • 2. Greene
  • 2. Lowndes
  • 2. Wilcox
  • 3. Marengo
  • 4. Butler
  • 4. Coosa
  • 4. Pike
  • 4. Russell
  • 5. Chambers
  • 5. Clarke
  • County Median Family Income
  • Wilcox 22,200
  • Sumter 23,176
  • Bullock 23,990
  • Greene 24,604
  • Perry 26,150
  • Macon 28,511
  • Lowndes 28,935
  • Dallas 29,906
  • Butler 30,905
  • Crenshaw 31,724

22
History of Economic Development in Alabama
  • Throughout the 20th Century, Alabamas economic
    development strategy was built on low taxes and
    unskilled, low-cost labor.
  • In the later 20th Century, the U.S began to
    export low wage, polluting industries new focus
    on high technology.
  • Alabama was poorly positioned to compete when
    question became not what does labor cost but
    what does labor know.

23
The State of the South 2002 Shadows in the
Sunbelt Revisited (MDC, Inc.)
  • National recovery wont bring jobs back to the
    rural South. Production has moved to other
    countries with lower wages, or plants have
    substituted technologically advanced machines for
    people. Tens of thousands of jobs are not coming
    back.
  • Gone forever is the kind of economic development
    strategy that Alabama and other Southern states
    used for decades to lure industry Enticing
    companies from afar to relocate with the bait of
    cheap land, low taxes and a surplus of
    hardworking but undereducated workers. That old
    recipe no longer works.

24
Tax Burden
  • TOTAL PER CAPITA STATE AND LOCAL TAX REVENUE (FY
    2000)
  • STATE TAXES NAT. RANK
  • Georgia 2,841 25
  • North Carolina 2,664 31
  • Florida 2,624 35
  • Kentucky 2,517 39
  • Louisiana 2,436
    41
  • South Carolina 2,379
    44
  • Arkansas 2,230 47
  • Mississippi 2,214 48
  • Tennessee 2,185
    49
  • Alabama 2,117 50
  • National Average 3,100
  • Alabama 68 of Nat. avg 75 of Georgias tax
    burden

25
Property Tax Revenue 2002 (Per Capita)
  • PROPERTY TAX REVENUE PER CAPITA (FY 2000) 
  • STATE PROP TAXES NAT. RANK
  • Florida 882 22
  • Georgia 725 33
  • South Carolina 668 36
  • North Carolina 572 39
  • Mississippi 514 40
  • Tennessee 507 41
  • Kentucky 426 45
  • Louisiana 390 46
  • Arkansas 361 48
  • Alabama 301 50
  •   National Average 885
  • Alabama 34 of Nat. avg. 54 of other southern
    state avg. (561)

26
Education Spending
  • EDUCATION SPENDING PER K-12 PUPIL (2000-01)
  • STATE SPENDING NAT. RANK
  • Georgia 7,620 19
  • Kentucky 7,047 25
  • South Carolina 7,012 26
  • North Carolina 6,364 39
  • Florida 6,254 40
  • Louisiana 6,010 41
  • Mississippi 5,699 44
  • Tennessee 5,693 45
  • Arkansas 5,684 46
  • Alabama 5,210 47
  • National Average 7,463
  • Alabama 70 of national average 82 of other
    southern state avg.

27
Rural Schools
  • Local funding for education in Alabamas rural
    school systems is only 57 of the local support
    provided to school systems in the states
    metropolitan areas.
  • County and city school systems in Alabamas 45
    rural counties average 793 per student in local
    support.
  • County and city school systems in the states 22
    counties located in metropolitan statistical
    areas average 1,386 per student a difference
    of 593 per student.
  • (Source Public Affairs Research Council of
    Alabama, Samford University, Local Support for
    Public Schools Tax Rates and Revenues Per
    Student, 1999).

28
Economic Growth
  • ECONOMIC GROWTH
  • ( change in employment 2002-03)
  • STATE NAT. RANK
  • Florida 4
  • Tennessee 10
  • Mississippi 12
  • Arkansas 16
  • Louisiana 18
  • Georgia 25
  • Kentucky 28
  • South Carolina 32
  • North Carolina 40
  • Alabama 41

29
Economic Growth
  • INDEX OF STATE ECONOMIC MOMENTUM (September 2002)
  • STATE NAT. RANK
  • Florida 5
  • Tennessee 12
  • South Carolina 20
  • Georgia 22
  • Arkansas 23
  • Kentucky 24
  • Mississippi 25
  • North Carolina 27
  • Louisiana 33
  • Alabama 38
  • The Index looks at one-year changes in 1)
    employment, 2) personal income, and 3) population
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