Since New York State mandated a cap on taxes, school officials are beginning to pay attention to local businesses that apply for a PILOT or Payment In Lieu Of Taxes. At its February 6 Board of Education meeting at Phoenicia Elementary School, Onteora Central School District Superintendent Victoria McLaren worried that the two coming together is a game changer. “Yes, they’re specifically called out in the tax cap formula.” Within the formula, a PILOT is considered revenue and not a disbursed tax. School officials are in agreement that it makes no sense. Assistant Superintendent for Business Monica LaClair offered a more detailed explanation. “As a concept, PILOTs are specifically identified in the formula so they would be taken out of the tax levy and added to the budget on the revenue side.”
Recently there was a pubic hearing on a PILOT proposal for the hotel Woodstock Way, located on Waterfall Way in Woodstock. It seeks to have $335,381 in property taxes, $198,000 in state sales tax and $24,198 in mortgage tax waived over the course of ten years. The Ulster County IDA will decide on February 14 whether to grant the tax break.
LaClair said, “The first year is really a wash, but what you are losing is that addition as the value increases.” And if more PILOT requests are granted through the Ulster County IDA (Industrial Development Agency), it could have a profound impact. “Some schools have seen it where, because of PILOTs they’ve had negative tax-caps and that’s really bad.” LaClair continued, “When we had the CPI fall below two-percent we’ve seen it happen a lot.” In the past, other businesses such as Full Moon Resort and the Emerson, both within the Onteora district have been given the stamp of PILOT approval according to Trustee Laurie Osmond. It was never something she thought to worry about as a Trustee.
But the proposed PILOT for the hotel project, Woodstock Way, located in a heavily trafficked area in Woodstock was the tipping point that took school officials into the worry mode of, what’s next? McLaren additionally voiced concern over a proposal through the Governor’s office to use PILOT on State Forest preserved land. Instead of towns locally assessing forest preserves, the State would allow a PILOT with a tax cap. McLaren said this would have profound budget implications on school districts.
Osmond presented a resolution that would oppose the Woodstock Way PILOT and asked for a vote so it could be submitted by February 7, the deadline for IDA public commentary. The original resolution was taken from the New Paltz School district, which have been grappling with similar problems. After lengthy discussions trustees agreed that it unfairly went after one business where the problem was with the PILOT formula itself. Trustee Bennet Ratcliff said, “I’m not a fan of PILOTs and I don’t think we should be using PILOTs for economic developments. I’m against the law that was passed in the 1970’s that said we should be using PILOTs to do this.” He continued, “But I’m also against this resolution because I think it singles out one business and I think that if were going to single out one particular business we should look at every single abatement we have on the books and find out which ones we do and don’t believe should be abated and go after each one.” He suggested a resolution that opposes PILOTs in general. Osmond said, “I don’t want to say I’m opposed to economic development, it’s a great thing. I’m personally very excited when new businesses open in the area.” She continued, “My point is that this will not be the last one and I don’t know, it’s a concern to me. It may be $30,000 a year that we don’t get and that may not be a large sum of money, but every year multiply by several businesses…I mean we just approved spring coaches and that totaled $30,000, so these things count and these things are important.” Trustees agreed that targeting one business was unfair and the resolution was dismissed.