Forest land taxes reinstated

ALBANY — Municipalities in three north country counties will continue to receive almost $14 million in property tax payments on state-owned Forest Preserve land within their boundaries.

In a case with major fiscal ramifications for towns in the Adirondack and Catskill parks, a state appeals court Friday overturned a lower court decision that had enjoined the state from paying property taxes to local governments.

"Without this assistance, the towns would face economic devastation," said Brian L. Houseal, executive director of the Adirondack Council. "While these lands don't require a lot in the way of local services, they can't be logged or developed, so state tax payments represent their only chance to gain the revenue needed to maintain roads, fight fires and enforce the law."

In November 2007, Chautauqua County Judge Timothy J. Walker overturned state law governing state property tax payments to local governments, calling the payment system "arbitrary." While the case, Dillenburg v. New York, dealt with a small tract in the town of Arkwright, the ruling effectively voided all state tax payments to local governments across New York.

In the decision announced Monday, four appellate division judges in Rochester ruled unanimously that New York had legally waived its sovereign immunity with respect to being taxed by municipalities. Because this waiver is a matter of legislative discretion, it is not liable to challenges based on "equal protection," as was this case, thus reversing Judge Walker's decision.

Had the lower court decision been upheld, town governments would have to seek other revenue streams, likely in the form of higher property taxes on nonexempt properties.

"If we had lost these payments, it would put pressure on town supervisors to oppose further state purchases of land," said John F. Sheehan, Adirondack Council spokesman. "Towns benefit from having Forest Preserve land. This keeps them from worrying that the Forest Preserve would be a drain on them rather than an asset."

In 2006, according to the most recent numbers available from the state Office of Real Property Services, St. Lawrence County received more than $5.2 million in state tax payments on some 230 parcels, totaling 293,000 acres of Forest Preserve land.

St. Lawrence's tracts range in size from the smallest, 581 acres, to the largest, 56,719 acres, both of which are in the town of Fine. Other large tracts in the county include a 30,707-acre parcel in the town of Piercefield and two parcels in the town of Colton that total more than 60,000 acres combined.

That same year, Lewis County received more than $1.1 million in state tax payments on 84,800 acres. Forest Preserve land in the county comprises some 450 tracts ranging in size from a 221-acre parcel in the town of Lyonsdale to a 27,298-acre parcel in the town of Greig.

Franklin County gets $7.5 million per year. The town of Santa Clara receives the largest tax payment of any town, approximately $2 million annually, while the town of Bellmont gets the smallest at about $80,000.

In all, the ruling reinstates $70 million in annual tax payments to 92 towns and 12 villages in the Adirondack Park.

Ad valorem tax payments for state-owned land in Adirondack communities date from 1886.

"This is a major victory for those who live, work and recreate in the Adirondacks and Catskills," said Neil Woodworth, executive director of the Adirondack Mountain Club. "The state Forest Preserve, which protects more than 3 million acres of wild lands in the Catskills and Adirondacks, is an important asset to all New Yorkers, and the fiscal burden of maintaining these lands should be shared by all New Yorkers and not fall on the shoulders of a few."

"This reinforces the state's 122-year commitment to support the tiny Adirondack towns that host its most important wild forest lands," Mr. Houseal said.

The decision is available online.