Governor Jim Douglas has vetoed a bill that would have added fees and increased penalties in the state's current use tax program.

Under current use, a property is taxed on its value as a farm or forest land, rather than its higher, development value. The bill adds a one time fee to the program, and it increases penalties if land is withdrawn for development.

The changes in the Current Use program are intended to put it on a solid financial footing. But the bill faces a possible veto from Governor Jim Douglas. He says it will result in major tax increases for landowners who withdraw their property.

The Senate has approved legislation that supporters say will help put the state's Current Use program on solid financial ground. But the bill includes a proposed change that has set off a heated debate.

VPR's Steve Zind talks about the proposed changes and the role of Current Use in Vermont's economy with Rep. Allison Clarkson and Agency of Natural Resources Secretary Jonathan Wood.

The House has given preliminary approval to a bill that's viewed as the first effort to reduce spending in the 2011 fiscal year. The legislation places a one year moratorium on new applications under the state's current use law.