How Can Cities Finance The Care of Urban Forests?

Chapel Hill, NC (August 9, 2013) – Urban trees are a critical capital investment for a city, with concrete benefits. They improve air quality, save energy, help manage storm water and water quality, and offer a variety of health and psychological benefits to residents. But cities struggle to pay for the maintenance and improvement of their urban forests and ensure that urban forestry programs are financed in a sustainable way. Lexi Kay at the Environmental Finance Center at the University of North Carolina suggests assessment districts, bonds, a parcel tax, and more ideas for funding urban forestry.

unc finance centerAccording to Kay, at the national level, there may be limited funding for urban forestry through the U.S. Forest Service. In 2007, $30.1 million was financed to the 50 state Urban and Community Forestry programs. In addition, widespread decreased funding and competition with other public services is likely the greatest challenge to urban forest advocates today.

This leaves room for states and municipalities to get creative in financing their urban forestry initiatives. Managing the urban forest is expensive. According to a 2007 American Public Works Association report, almost 75% of spending on urban forests goes toward maintenance and management. That leaves a small portion for actually planting new trees.

Kay suggests several options for cities that want to improve their urban forestry budgets. Based on some innovative thinking in San Francisco, she suggests assessment districts, bonds, a parcel tax, and more:

  • Establish a Landscape and Lighting Assessment District (LLAD), a tool used widely throughout California to fund public improvements including street trees, street lights, and recreational facilities.
  • Create a Parcel Tax, or a special tax levied to provide specific benefits. The parcel tax would create a dedicated funding stream for street trees.
  • Issue a General Obligation Bond that would be retired through the general tax revenues that could be used to fund the capital costs of tree planting and establishment, but could not be used for maintenance.

There is no one-size-fits-all solution for urban forestry programs. In addition to the above Kay suggests other financing techniques including financing instruments such as foundation grants, special assessments and capital improvement budgets. Potential revenue streams may include some fees, utility bill donations, tax incentives, carbon trading, and more.  Read Kay’s complete article.

Source: Alexandra Kay, Financing Urban Forestry,” UNC Environmental Finance Center (August 9, 2013)