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Clean & Green Explained

Written by Tax Clarion on . Posted in General Information.

In Pennsylvania, the Clean and Green Program (formally known as the Pennsylvania Farmland and Forest Land Assessment Act of 1974) is designed to provide a preferential tax assessment for owners of farmland, forest land, and open space land. It essentially allows landowners to have their property assessed based on its use value (agricultural, forest, or open space) rather than its market value, which generally results in lower property taxes for those enrolled.

During a countywide reassessment, which is a revaluation of all properties to bring assessments in line with current market values, properties enrolled in the Clean and Green Program continue to be assessed based on their use value rather than the reassessed market value. This can sometimes cause concern or confusion about the potential tax impact on those who are not enrolled in the program.

Does Clean and Green Enrollment Raise Taxes for Others?
The short answer is no—enrollment in the Clean and Green program itself does not directly raise taxes for people who are not enrolled. However, it can have indirect effects on the overall tax distribution, which might lead to higher taxes for some non-participants depending on how the local tax structure is affected by the reassessment.

Here are some key points to consider:

  • How Clean and Green Works:
    • The Clean and Green program lowers property taxes for participants by assessing the land based on its use (such as farming or timber) instead of its full market value.
    • Property taxes are determined by multiplying the assessed value by the tax rate (millage rate) set by the taxing authorities (county, school district, municipality).
    • Since the assessed value for land in Clean and Green is typically much lower than the market value, landowners in the program pay less in property taxes than they would under normal market value assessments.
  • Impact on Countywide Reassessments:
    During a countywide reassessment, properties are revalued to reflect their current market values. For those not enrolled in Clean and Green, this means their property’s assessed value may increase, which could lead to higher property taxes if the tax rate remains the same or if there isn’t an adjustment in the millage rate to compensate for the reassessed values.
    • Clean and Green participants will continue to have their land assessed based on its use value rather than the newly reassessed market value, meaning their property tax burden remains comparatively lower.
    • If a significant number of properties are enrolled in Clean and Green and benefit from these preferential assessments, it could shift the overall tax burden to other property owners (who are not enrolled) because the local government still needs to collect a certain amount of revenue (tax levy) to fund public services.
  • Tax Burden Distribution:
    • The overall tax levy (the total amount of property taxes a county, municipality, or school district needs to raise) is fixed. If some properties are taxed at a lower rate (like Clean and Green properties), the remaining properties that are not enrolled may end up shouldering a larger proportion of the total tax burden.
    • This doesn't mean that Clean and Green directly raises taxes for others—it simply reduces the tax base, and non-participants could face higher taxes depending on how the reassessment affects the overall distribution of taxable property.
  • Millage Rate Adjustments:
    • After a reassessment, counties or municipalities may adjust the millage rates to prevent large swings in tax bills. If property values increase substantially, a government may reduce the millage rate to avoid a dramatic tax increase. However, the burden distribution will still reflect the differences between Clean and Green properties and those assessed at full market value.
    • Non-participants in Clean and Green could see increased taxes if their property is reassessed at a higher market value and if the overall tax base does not adjust to compensate for the reduced taxable value from Clean and Green properties.
  • Roll-Back Taxes for Clean and Green:
    • If a property owner enrolled in Clean and Green changes the use of their land (e.g., develops it for residential or commercial purposes), they may be subject to roll-back taxes. This means the landowner will have to pay the difference between the taxes paid under Clean and Green and what would have been paid under regular assessment, plus interest, for the past 7 years.
    • This provision ensures that properties in Clean and Green are not permanently tax-advantaged if they no longer meet the criteria for preferential assessment.

Conclusion:
Clean and Green enrollment itself does not directly raise taxes for non-participants, but it can shift the tax burden. When many properties receive preferential tax treatment under the program, the tax base is reduced, and the remaining property owners may end up paying a larger share of the total tax levy. However, the impact of this shift depends on the local tax structure, millage rate adjustments, and the specifics of the countywide reassessment.

When we initially calculated the numbers (see them here), we assumed that the county would collect less revenue for every parcel that enrolled in the Clean & Green program. However, upon further analysis, it appears the county could still increase its tax revenue by 44%, regardless of Clean & Green participation, by shifting the tax burden to properties not enrolled in the program. This makes it challenging for us to accurately determine which properties will be most impacted and leaves us unable to pinpoint the exact distribution of the county-wide tax burden. As a result, we cannot determine the true percentages of properties that will experience an increase, no change, or a decrease in their tax bills.

Our initial numbers indicate that full participation in Clean & Green would save taxpayers $1,639,380. That still holds true for those participating. However, those who are not eligible would see an increase of $1,639,380. We are still unclear on exactly how that would be distributed.

Again, these have been our findings. We welcome the county's input and gladly offer the opportunity to correct any information that we may be misrepresenting.