Navigating Dual Enrollment: Assessing Compatibility Between Improved Management Carbon Offset Projects and Preferential Property Tax Programs Across Nine States

Abstract

Dual enrollment in preferential property tax programs and improved forest management carbon offset projects is recognized as a promising strategy to optimize financial benefits and achieve sustainable management objectives for landowners. Despite this, empirical studies examining this question are limited. To assess the nuances of program compatibility for dual enrollment, a policy analysis and 37 semi-structured expert interviews were conducted to explore state-level forest tax interpretations, enforcement, and county-level discretion, with a focus on harvest and forest management plan requirements. While results indicate relatively high levels of compatibility in the states assessed, none have strategic, long-term approaches addressing enrollment in both program types, with compatibility generally being contingent upon case-by-case evaluations of landowners’ management objectives and program requirements. In many instances, compatibility is determined by county tax officials with varying degrees of input from state governments. This decentralized approach can lead to a confusing operating environment, potentially affecting the opportunities for landowners to participate in both programs. These issues are identified as key barriers to the expansion of market participation among small landowners, often who are interested in retaining their tax benefits provided by tax programs and may be concerned about forfeiting them to participate in an improved forest management project.