In many areas of the country, demand for rural land, particularly open space and agricultural land at the rural-urban fringe, has increased dramatically in recent years. As expanding urban areas increase pressures for development, the value of rural land increases far above its farm or forest value because of potential for residential, commercial, or industrial use (Keene et al., 1976). In response to this increased urban demand for land, many states have elected to enact legislation in an attempt to preserve open space and agricultural land. A popular approach has been to allow farmland and other eligible types of rural land to be assessed on the basis of value in current use rather than market value. As of 1977, such differential assessment laws had been passed in forty-four states, beginning with Maryland in 1956(Coughlin et al., 1978). Theoretically, the wide-spread adoption of such laws indicates the public value for open space and agricultural land exceeds alternative private development value.
Previous studies have summarized the provisions and major characteristics of state differential assessment laws, including Coughlin et al. (1978), Hady and Sibold (1974), and Keene et al. (1976). The impact of differential assessment legislation on fiscal financing and land use planning has been investigated in several states including New York by Conklin and Bryant (1974) and California by Gustafson and Wallace (1975). The purpose of this study is: (i) to determine the factors affecting the adoption of state agricultural differential assessment laws, (2) to analyze the effects of these factors on the type of differential assessment legislation adopted, and (3) to predict what type of differential assessment legislation may be adopted by states which presently have no such laws.
Types of differential assessment laws
Differential assessment laws are usually classified as one of three general