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Adirondack leaders oppose state land PILOT proposal

February 23, 2018
By PETER CROWLEY and AARON CERBONE - For the News ( , Lake Placid News

SARANAC LAKE - New York's budget chief says local governments would get as much or more money under a proposal to switch state land property taxes to payments in lieu of taxes (PILOTs). In the Adirondacks, however, many leaders beg to differ.

In response to the Cuomo administration's proposal, the Adirondack Association of Towns and Villages issued a statement last week opposing any new state land purchases in the Adirondack Park. Towns have veto power over state land purchases.

"Adirondack communities must be assured that the State will continue to bear its responsibility for sharing in the costs associated with these properties rather than imposing these costs on the declining number of local property taxpayers whose ability to pay taxes has been sharply restricted by the loss of economic growth associated with the acquisitions," the AATV wrote in a press release.

State Sen. Betty Little and Assemblyman Dan Stec, Queensbury-based Republicans who represent much of the Adirondack Park, have also come out against the proposal. So have three of the region's biggest environmental groups: the Adirondack Council, Protect the Adirondacks and Adirondack Mountain Club.

"This PILOT and tax cap proposal represents a radical and unlawful departure from the current method of determining the amount of real property taxes paid by the state for the three million acres of Forest Preserve in the 16 Forest Preserve counties," Neil Woodworth, a lawyer who is head of the Adirondack Mountain Club, wrote in a letter to Gov. Andrew Cuomo published Monday on the Adirondack Almanack website.

Robert Mujica, director of the state Division of Budget, says the state would save money not by giving local governments less in property taxes but rather by ending the "vestigial" practice of reassessing state land every year. That process is complicated and eats up a lot of staff time, Mujica said. This proposal cuts out that work, and "you end up in the same place," he said.

But leaders in local governments are concerned that the payments, which would be capped at an annual 2 percent increase, would not be enough to cover rising operating costs.

"I think that eventually that burden is going to fall on the taxpayers; there's going to be a gap," said Ronald Moore, supervisor of the town of North Hudson, which recently did not veto the state's purchase of the 20,000-acre Boreas Ponds tract.

The state pays property taxes on much of its land to towns, counties, schools, cities and villages. That includes the Adirondack Forest Preserve, which makes up nearly half of the Park's 6 million acres. Those taxes keep many local government services and jobs afloat, especially in some Adirondack towns where Forest Preserve makes up the vast majority of the land.

Moore said North Hudson is 50 to 70 percent Forest Preserve, and with health care costs rising 10 to 12 percent annually, he does not see how the town will be able to keep up.

The News asked Cuomo Saturday, Feb. 17, after he gave a speech at the Hotel Saranac, why his proposed budget would stop the state paying property taxes on its Forest Preserve land and instead make a PILOT to each town, county and school district.

"I have to get you the details on it," Cuomo replied. The next day, one of his press secretaries connected the News with Mujica, New York's budget chief.

The Cuomo administration's proposal is quite different from what Gov. David Paterson proposed in 2008. Paterson, facing a recession in December 2008, tried to save money by capping the local taxes the state pays on the Adirondack Forest Preserve, but he backed down in the face of unified local government and environmental group leaders.

"They were specifically trying to control and not do increases," Mujica said. "That's not what we're trying to do here."

One difference is that the Cuomo administration's proposal is statewide, not just for the Adirondacks.

Also, Mujica said local governments would get at least as much money from the state as they get now under the Cuomo proposal, perhaps even a little more since sometimes tax payments go up less than the tax cap.

"It should be a positive for them," he said.

He didn't mention, however, that the PILOT increase would be capped at 2 percent, whereas current property taxes can go up more than that.

This 2 percent cap falls short of the state's own projected increases for its property taxes. A table on page 116 of the fiscal year 2019 Executive Budget Financial Plan shows that in 2018, the state anticipates $258 million in PILOT and public land tax payments on all its lands, not just those within the Adirondack Blue Line. For 2019, the state anticipates a 1.9 percent increase to $263 million, but from 2019 to 2020 the projected payment would increase 2.3 percent. In 2021 and 2022, the state expects increases of 2.2 percent.

The value of Forest Preserve land generally doesn't change much year to year, since the state Constitution prevents it from being sold, logged or developed, but Mujica said state parcels elsewhere, such as in New York City, can change more in value.

Nevertheless, he said the measure wouldn't recoup any money from local governments.

"If you look at how we score things, we score zero savings associated with this," Mujica said. It would only save money through administrative efficiency, he said.

In the Adirondacks, town assessors appraise the state Forest Preserve, and state staff follow up with the equalization process. In much of New York, Mujica said staff from the state Department of Taxation and Finance do the appraisals.

Also, he said, "We thought it was better for local governments to know with certainty each year" how much money they would get from the state.

Fred Monroe, executive director of the Adirondack Park Local Government Review Board, said the proposal does not account for big changes in land value.

"If the value of a town goes up, say, by 20 percent, and this PILOT is capped at 2 percent, then obviously the community has to still raise the same amount of money, so it's shifting the tax burden from the state to the other taxpayers in the town," Monroe said.

He said that as supervisor of the town of Chester, he saw the municipality's total property value triple from $250 million to $750 million in 24 years.

"It would increase efficiency, but it would also increase unfairness," Monroe said of the proposal. "If you wanted an efficient government, the most efficient government is a dictatorship, but that's not necessarily the best government."

New York Real Property Tax Law says, "State lands subject to taxation shall be valued as if privately owned." In the Adirondack Park, "The total taxable assessed valuation of those state-owned wild or forest lands shall not be reduced."

A single word could change that, however - "notwithstanding." A budget is a law, and if this change is passed "notwithstanding" other laws, it would trump them.

In Woodworth's letter to Cuomo, the Mountain Club leader wrote, "Governor, you have made great progress in gaining the confidence and support of local government leaders to accepting [and] even supporting the purchase of public lands as an economic benefit to their towns and counties. This very ill-considered proposal by Tax and Finance and the Division of Budget represents a great threat to all that you have accomplished."

Mujica said that "If there are ways to revise this proposal to avoid unintended consequences," the Cuomo administration might be open to them during budget negotiations with the state legislature.



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