Aid to Dependent Woodland Owners
by
The Warped Woodturner
Wisconsin
(1400 words)
There are two Golden Rules. The Golden Rule #1 is about treating others the way you want to be treated. This article is about Golden Rule #2.
In his book Your Money or Your Life , Joe Dominquez listed his nine steps to financial independence, integrity and intelligence. Step #6 in his program is about valuing your life energy by minimizing spending. Homesteading is all about doing it yourself so you can minimize your spending. One big fly in the ointment is high property taxes taking too much of your gold. This article is about how you can hang onto more of it. That is where Golden Rule #2 comes in: They who have the gold set the rules. One example of this golden rule is government forestry incentive programs. If you can tolerate playing by their rules and own woodland you may be able to cash in. This might not be as bad as you think. At its best country freeloading is like the synergy created by individuals working together in concert to create a better outcome than the same individuals could do working alone.
Since The Warped Woodturner lives in Wisconsin this article focuses on a state forestry incentives program named the Managed Forest Law. If you live in a different state it will give you an idea of how to start your search for cashing in on the goodies in your state too. Don't limit your search for donors even if you live in the desert and there is not a tree in sight. Government giveaways abound.
Government programs usually exist for a reason though sometimes it may be hard to figure out why. Don't focus on that . Your job is to find out how you can benefit. Government incentives give you money to act in certain ways. Forestry incentives give away money to grow trees for later harvest.
According to the publication Wisconsin's Managed Forest Law PUB-FR-295-2010: "The Managed Forest Law (MFL) is a landowner incentive program which encourages sustainable forestry on private woodlands in Wisconsin. Together with landowner objectives, the law incorporates timber harvesting, wildlife management, water quality, and recreation to maintain a healthy and productive forest. Sustainable forest management benefits Wisconsin’s economy, hunting, fishing, wildlife, recreation, soils, waterways, and air quality, and renews our beautiful forests for everyone to enjoy ."
At first you might think you have to give up your land to keep your gold but the Wisconsin rule-makers realized some people might not like strangers on their land so they came up with open and closed categories of land. The open land category lets you keep more of your gold but closed acres are closed to the public.
THE RULES
Here are some of the rules for the MFL program:
• You must pay for and follow a forestry management plan written by an independent certified plan writer (ICPW) and approved by a Wisconsin DNR forester. Remember the rule-makers can make up their own fancy terms when they create their rules. An ICPW is a private consulting forester certified by the Wisconsin DNR and hired by the landowner to prepare a forest management plan.
• You can enroll in the MFL program for either 25 or 50 years
• You can withdraw early but only if you pay a penalty.
• You only currently pay a per acre fee for closed land of $8.34 instead of normal property taxes
• You pay a harvest tax and also a consulting fee to a private forester to arrange the timber sale (if you are smart) at harvest time as dictated by the management plan.
• You must pay a non-refundable petition fee to start saving
A Few More Rules
To be eligible for the Managed Forest Law, you must have ten or more acres of contiguous forestland. At least 80% of the land must be covered by forest with no more than 20% unsuitable for producing timber like water, vacant farmland, or roadways. Finally, you cannot use the land for crops, pasture or orchards. The good news for homesteaders is you can still cut firewood from your land that is in the MFL program but only for your own use.
The Gold You Keep
It may be easiest to illustrate here using TWW's property as an example. He has 30 acres total with about 24 wooded acres, one acre for his house and a few acres of prairie. He recently decided to put 18 acres into the MFL program.
The acres TWW put into MFL land is mostly popple. While people in other states may love their aspen where TWW lives they call the trees popple and they are giant weeds mostly good for feeding deer, grouse and paper mills. But the beauty of popple for aspiring freeloaders is all you have to do is watch the popple grow. When the forest management plan says to harvest you have the trees cut and pay some forestry consulting fees and the timber harvest tax on the money you get for the timber.
Assuming he understands the rules here is how TWW calculated what he will save in property taxes per year to start using his 2010 property tax statement:
• assessed value of 29 acres (one acre for house was removed): $72,000
• assessed value per acre for unimproved land is $2483 per acre
• $2483 per acre times .14% property tax rate equals $34.76
• $34.76 minus the $8.34 fee for close land means $26.42 saved in property taxes per acre
• $26.42 times 18 acres in MFL is about $476 of property taxes avoided per year
Remember: your results may vary. You should also realize a few things here: First, TWW had to pay for the forest management plan which was around $400. But second, he gets money off property taxes for the next 25 years. Third, while the amount he will pays per acre is adjusted periodically so are property taxes and it usually is not downward. Finally, if TWW ever somehow makes so much money as an author he wants to itemize deductions on his income tax he will have less property tax to deduct.
Perhaps you should also know TWW is used to dealing with rules since he used to work for a county government. He moved to the country as soon as he could collect his pension. Interestingly enough right before he moved beyond the sidewalks, governments began facing revenue shortfalls and needed to shed staff. His employer devised a great buyout plan. Even though TWW was planning on retiring anyway, he still qualified for the buyout. His goals matched the goals of the people with the gold so he cashed in without a major compromise on his values. It was pure synergy. If you already have trees on your land you may already want to harvest trees in the future so your goals may already match some government program.
There is free money out there just waiting to be harvested. You just need to find programs applying to you and learn the rules. Look at it as a game you play with the government. Self-reliance is nice but why not find a way to have the government pay you to do it.
If you want to learn more about sources of this gold for woodland owners check with your local or state foresters. Some people may also get help from the Web page 'Financial Incentive Programs for Non-Industrial Private Forest Owners' found at: http://www.srs.fs.usda.gov/econ/data/forestincentives/
Finally, another good source of leads is the next generation . See if your local high school has a Future Freeloaders of America (FFA) chapter.
In his book Your Money or Your Life , Joe Dominquez listed his nine steps to financial independence, integrity and intelligence. Step #6 in his program is about valuing your life energy by minimizing spending. Homesteading is all about doing it yourself so you can minimize your spending. One big fly in the ointment is high property taxes taking too much of your gold. This article is about how you can hang onto more of it. That is where Golden Rule #2 comes in: They who have the gold set the rules. One example of this golden rule is government forestry incentive programs. If you can tolerate playing by their rules and own woodland you may be able to cash in. This might not be as bad as you think. At its best country freeloading is like the synergy created by individuals working together in concert to create a better outcome than the same individuals could do working alone.
Since The Warped Woodturner lives in Wisconsin this article focuses on a state forestry incentives program named the Managed Forest Law. If you live in a different state it will give you an idea of how to start your search for cashing in on the goodies in your state too. Don't limit your search for donors even if you live in the desert and there is not a tree in sight. Government giveaways abound.
Government programs usually exist for a reason though sometimes it may be hard to figure out why. Don't focus on that . Your job is to find out how you can benefit. Government incentives give you money to act in certain ways. Forestry incentives give away money to grow trees for later harvest.
According to the publication Wisconsin's Managed Forest Law PUB-FR-295-2010: "The Managed Forest Law (MFL) is a landowner incentive program which encourages sustainable forestry on private woodlands in Wisconsin. Together with landowner objectives, the law incorporates timber harvesting, wildlife management, water quality, and recreation to maintain a healthy and productive forest. Sustainable forest management benefits Wisconsin’s economy, hunting, fishing, wildlife, recreation, soils, waterways, and air quality, and renews our beautiful forests for everyone to enjoy ."
At first you might think you have to give up your land to keep your gold but the Wisconsin rule-makers realized some people might not like strangers on their land so they came up with open and closed categories of land. The open land category lets you keep more of your gold but closed acres are closed to the public.
THE RULES
Here are some of the rules for the MFL program:
• You must pay for and follow a forestry management plan written by an independent certified plan writer (ICPW) and approved by a Wisconsin DNR forester. Remember the rule-makers can make up their own fancy terms when they create their rules. An ICPW is a private consulting forester certified by the Wisconsin DNR and hired by the landowner to prepare a forest management plan.
• You can enroll in the MFL program for either 25 or 50 years
• You can withdraw early but only if you pay a penalty.
• You only currently pay a per acre fee for closed land of $8.34 instead of normal property taxes
• You pay a harvest tax and also a consulting fee to a private forester to arrange the timber sale (if you are smart) at harvest time as dictated by the management plan.
• You must pay a non-refundable petition fee to start saving
A Few More Rules
To be eligible for the Managed Forest Law, you must have ten or more acres of contiguous forestland. At least 80% of the land must be covered by forest with no more than 20% unsuitable for producing timber like water, vacant farmland, or roadways. Finally, you cannot use the land for crops, pasture or orchards. The good news for homesteaders is you can still cut firewood from your land that is in the MFL program but only for your own use.
The Gold You Keep
It may be easiest to illustrate here using TWW's property as an example. He has 30 acres total with about 24 wooded acres, one acre for his house and a few acres of prairie. He recently decided to put 18 acres into the MFL program.
The acres TWW put into MFL land is mostly popple. While people in other states may love their aspen where TWW lives they call the trees popple and they are giant weeds mostly good for feeding deer, grouse and paper mills. But the beauty of popple for aspiring freeloaders is all you have to do is watch the popple grow. When the forest management plan says to harvest you have the trees cut and pay some forestry consulting fees and the timber harvest tax on the money you get for the timber.
Assuming he understands the rules here is how TWW calculated what he will save in property taxes per year to start using his 2010 property tax statement:
• assessed value of 29 acres (one acre for house was removed): $72,000
• assessed value per acre for unimproved land is $2483 per acre
• $2483 per acre times .14% property tax rate equals $34.76
• $34.76 minus the $8.34 fee for close land means $26.42 saved in property taxes per acre
• $26.42 times 18 acres in MFL is about $476 of property taxes avoided per year
Remember: your results may vary. You should also realize a few things here: First, TWW had to pay for the forest management plan which was around $400. But second, he gets money off property taxes for the next 25 years. Third, while the amount he will pays per acre is adjusted periodically so are property taxes and it usually is not downward. Finally, if TWW ever somehow makes so much money as an author he wants to itemize deductions on his income tax he will have less property tax to deduct.
Perhaps you should also know TWW is used to dealing with rules since he used to work for a county government. He moved to the country as soon as he could collect his pension. Interestingly enough right before he moved beyond the sidewalks, governments began facing revenue shortfalls and needed to shed staff. His employer devised a great buyout plan. Even though TWW was planning on retiring anyway, he still qualified for the buyout. His goals matched the goals of the people with the gold so he cashed in without a major compromise on his values. It was pure synergy. If you already have trees on your land you may already want to harvest trees in the future so your goals may already match some government program.
There is free money out there just waiting to be harvested. You just need to find programs applying to you and learn the rules. Look at it as a game you play with the government. Self-reliance is nice but why not find a way to have the government pay you to do it.
If you want to learn more about sources of this gold for woodland owners check with your local or state foresters. Some people may also get help from the Web page 'Financial Incentive Programs for Non-Industrial Private Forest Owners' found at: http://www.srs.fs.usda.gov/econ/data/forestincentives/
Finally, another good source of leads is the next generation . See if your local high school has a Future Freeloaders of America (FFA) chapter.
Good luck with your search.
1 comment:
I just wanted to be the first to wish you and your blog a very happy earth day.
Post a Comment