State must pay land taxes like everyone else
1886 Forest Preserve deal must be upheld
Great compromises allow great things. The Great Compromise of 1787, also known as the Connecticut Compromise, let the United States move forward with a two-house Congress: a House of Representatives with population-based democracy, and a Senate that treated each state equally, large or small. That balance has held since then.
Few political compromises have such staying power because few are as just in balancing a governed people’s interests in the long term — to the seventh generation ahead, as the Iroquois would say.
Here in New York state, one compromise that is just enough to have been with us for more than 131 years is the deal for the creation of the Adirondack Forest Preserve. It let the state put what was then a million acres (now 2.6 million) under unprecedented protection: “The lands of the state, now owned or hereafter acquired, constituting the forest preserve as now fixed by law, shall be forever kept as wild forest lands,” says the state constitution. “They shall not be leased, sold or exchanged, or be taken by any corporation, public or private, nor shall the timber thereon be sold, removed or destroyed.”
For Adirondack residents, private businesses and local governments, that was a huge sacrifice of economic potential. Therefore, a key part of the deal was that the state would pay full property taxes on its Forest Preserve, just as if it was private land: at the same rates, with the same appraisal process. That was codified into law in 1886 and remains with us in state Real Property Tax Law Section 542, which says “state lands subject to taxation shall be valued as if privately owned.”
This doesn’t just apply to the Adirondacks, either. Most New Yorkers probably don’t realize it, but much of the state’s land throughout New York is taxed, from Western New York to Long Island, including parcels in New York City.
That’s as it should be, for several reasons:
¯ A state land purchase shouldn’t gut the local tax base and thus jack up other people’s taxes.
¯ People who recreate on state land use local government services such as roads and emergency services, which must be paid for.
¯ The state government that sends unfunded mandates down to local governments needs to feel what it’s like to be a taxpayer in those places.
¯ The Forest Preserve, at least, is already assessed at less value than if it was privately owned, because a private owner could harvest timber, develop or sell the land. The state can’t do that, as per the constitution.
Nevertheless, state officials have tried various ways to wriggle out of that commitment over the years, but Adirondackers have held strong. When Gov. David Paterson’s administration tried to cap the Forest Preserve’s property taxes almost a decade ago, local government leaders and environmentalists patched up their differences to unite and successfully resist it. Now the Cuomo administration wants to cap state taxes, too, and again, Adirondack leaders aren’t having it.
Deep in Cuomo’s 2019 Executive Budget, his Division of Budget tucked a plan to replace the state’s property tax on all its land throughout New York with payments in lieu of taxes. These PILOTs would initially match current property taxes, but instead of increasing at the same rate as for every other taxpayer, the PILOT increase would be capped at the local tax cap, the rate of inflation or 2 percent, whichever is lower.
Division of Budget chief Robert Mujica and his spokesman Morris Peters insist local governments would get the same amount of revenue as with taxes, and state Department of Environmental Conservation Commissioner Basil Seggos echoed that Tuesday in a joint budget hearing in response to Assemblyman Dan Stec, whose district includes much of the eastern Adirondacks.
But that’s just not true, and the Division of Budget staffers know it — as shown by their own numbers. Even at the maximum 2 percent, this PILOT increase would fall short of the state’s own projected property tax increases. A table on page 116 of the 2019 Executive Budget Financial Plan shows that from 2019 to 2020 the projected payment would increase 2.3 percent. In 2021 and 2022, the state expects increases of 2.2 percent.
Local government and environmentalist leaders know enough to see right through this. They know that over time, this PILOT plan would lessen the revenue towns, counties, school districts, villages and cities would get from the state.
Even worse, it would give the state the power to essentially set its own taxes, which is a slippery slope. Most PILOTs must be negotiated with each taxing entity, but not this one — the state would simply enact it without asking, say, the town of Harrietstown or the Indian Lake Central School District if it’s OK with them.
Such a change would make it far too easy for the state to lower its taxes even more in the future, without any fair process. Ultimately, that could starve out the people of the Adirondacks.
Mujica told us the reason for doing this is not to reduce state tax payments but to save money by eliminating the staff time it takes to assess state land. However, in the Adirondacks at least, those appraisals are done not by state staff but by town assessors, who will be needed even if the PILOTs are enacted. The only way state appraisers get involved is in grieving the assessment if the state doesn’t agree with it — the same as with any other taxpayer.
If the state is to own property, it needs to pay its taxes the same way everyone else does.
If it won’t, the Adirondack Association of Towns and Villages has said it would fight back the only way it can: by using towns’ veto power to block any future state land purchases in the Adirondack Park. Cuomo has forged a great deal of trust with these local leaders, as he boasted at a recent visit to Saranac Lake, but this PILOT plan would undermine the 1886 deal that allows the Forest Preserve to exist. Undermine that, and you ask for trouble.
Adirondack Mountain Club director Neil Woodworth’s letter to Gov. Cuomo, which we published as a Guest Commentary Friday, makes a very strong case that this PILOT plan is illegal.
Again, this isn’t just about the Adirondacks. This covert move would take tax revenue and control away from local governments all over the state. We want New Yorkers to know about it and reject it.