State Land tax cap: From the Department of Bad Ideas

Environmentalists, local governments and landowners’ associations don’t generally see eye to eye on local land issues. It takes a truly terrible idea to get them all on the same side and sending joint lobbying delegations to Albany.

Something like, say, Gov. Andrew Cuomo’s budget proposal to reinvent the way state forest land gets taxed in the Catskill and Adirondack Parks.

“It’s a proposal that gets pulled out about once every administration when budgets get tight,” says Jeff Senterman, executive director of the Catskill Center for Conservation and Development. “Somebody must have the Drawer of Bad Ideas in the budget office. They forget that they did it ten years ago and it went down in a ball of fire.”


Apparently the temptation to take a bite out of the Forever Wild property-tax apple is just too great for state budgeteers to resist. Pataki tried it. Spitzer tried it. Paterson tried it. Even Cuomo père gave it a shot. It’s a testament to the toughness of the agreement that created the Catskill and Adirondack Parks back in the late 1800s that the hoary old Forever Wild plan still holds up.

For more than a century, the state has been treated just like any other landowner in the Catskill Park. State forest lands are assessed on market value and taxed accordingly, and if the state doesn’t like its assessment, it can file a grievance with the town. The practice of treating Forever Wild lands just like private ones for tax purposes is enshrined in state law, in Real Property Tax Law sections 532a and 542, which date back to 1886.

Buried in Gov. Cuomo’s executive budget, released in January, is a poison pill for the towns in the Catskills and Adirondacks: a proposal to replace this system with a Payment In Lieu Of Taxes (PILOT) agreement, which would do away with regular land assessments and cap the state’s property tax payments to towns in the Parks at an automatic two percent increase each year.

On its face, Cuomo’s proposal doesn’t sound terribly out of line. A two percent tax cap? Sounds reasonable, right? It’s a nice, orderly number.

The problem is, the value of land doesn’t increase in a nice, orderly way. If land values in a town go up by more than two percent every year, and the state’s property taxes are capped, private landowners will be asked to pick up an ever-increasing share of town and school budgets — a discrepancy that will start out small, but may snowball over time, as the arbitrary state cap drifts farther and farther away from the reality of the market.

It’s not just numbers at stake. Once towns lose their home-rule authority over how state land is assessed, there’s no telling what future administrations might do with those PILOT agreements.

It’s probably fair to say that if New York State had not agreed to pay market-value property taxes way back when, the little towns nestled within the blue lines of the Catskill and Adirondack Parks would have fought the creation of the Parks tooth and nail. If the plan passes, Senterman says, towns are likely to stop allowing the state to buy any more parkland within their borders.

“Currently, if land is purchased by the state, towns have veto authority,” Senterman says. “What town is going to go, ‘Yeah, you can buy land in my town?’”

Towns like Shandaken, which is already more than two-thirds public land by area, have the most to lose, and will fight the hardest. Back in the 80s, Shandaken successfully fended off another state attempt to seize authority over local property tax bills. Shandaken’s assessors decided that state lands in the town were worth $19,874,655; the state Board of Equalization and Assessment put them at $16,516,600 and not a penny more. The town sued the state and won a decisive victory.

The 1984 court brief in Shandaken v. Bd. of Equalization by State Court of Appeals chief justice Lawrence Cooke, himself a native son of Sullivan County, is short and to the point. Cuomo’s budget officials probably should have read it before deciding to take another whack at forest land taxes.

Local advocates think the plan is unlikely to make it into the final budget. Both the state Senate and Assembly have soundly rejected the proposal; the governor’s PILOT plan was pointedly omitted from both of the one-house budget bills passed earlier this month. Even the governor’s own budget officials seemed taken aback by the ferocity of the opposition, according to local advocates who recently spent some quality time in Albany, patiently explaining to legislators and bureaucrats why the plan is such a bad idea.

“When he was asked a few weeks ago in Saranac Lake about this proposal, the governor acted like he’d never heard of it, and said he’d look into it,” said Neil Woodworth, executive director of the Adirondack Mountain Club.

It’s almost as if they didn’t actually do their homework before raiding the Bad Idea Drawer.

“I think it’s dead,” Woodworth says. And even if it’s not, lawyers are already lining up to punt it back into the drawer where it belongs. “I think it’s unlawful. I don’t think that you can go back and abrogate an understanding on which the whole creation of the Forest Preserve was built. I don’t think the courts will stand for that.”

The saddest thing about the whole debacle? Even if this ill-wrought plan never sees the light of day, it has already struck a blow at the fragile spirit of cooperation on New York State’s ongoing efforts to make forest tax law more environmentally friendly.

“Some of the letters that have come down from communities in the Adirondacks clearly say, ‘We don’t trust you any longer. Don’t ask us to support the Empire Forests for the Future Initiative,’” Woodworth says. “This has eroded a lot of the support the governor had built up in the Adirondacks like snow in warm rain.”

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