Adirondack tax changes fought

ALBANY — Municipal officials and nonprofit groups in the Adirondacks are ramping up their campaign against a proposal to cap state tax payments to local governments on Forest Preserve lands.

In his executive budget, Gov. David A. Paterson proposed changes to Section 544 of New York's real property tax law that would permanently cap the taxes paid on state-owned land in the Adirondack and Catskill parks.

A cap also would be placed on taxes for lands subsequently acquired for addition to the Forest Preserve.

The tradition of property tax payments by the state to local governments dates from 1886, when the Adirondack Park was created. The state agreed to pay local property taxes on state-owned land within the park in order to protect the local tax bases.

Scott Lorey, legislative director for the Adirondack Council, testified Tuesday at a public hearing on the budget and environmental conservation before the Senate Finance and Assembly Ways and Means committees.

He said it would be "crushing to the local tax systems" to freeze state tax payments in small-population municipalities where three-quarters of the land base is state owned.

"At a time when the state is working on several major deals to buy more land and add it to the Forest Preserve, a cap of tax payments would serve as an unfunded mandate on communities that are already burdened by state actions," Mr. Lorey testified. "Many of these same towns have large tracts of privately owned timber lands which are enrolled in state timber tax abatement programs, meaning the landowners receive up to an 80 percent tax break, which the state only reimburses a small portion of the loss."

In a statement issued Wednesday, the Residents Committee to Protect the Adirondacks expressed its "strongest opposition" to the proposal.

"These changes will generate little short-term savings for the state; however, they permanently alter the relationship between the state and Adirondack communities in a way that will eventually do great fiscal harm to these communities by disproportionately shifting more of the burden for services onto local tax payers," RCPA said. "Moreover they provide a powerful disincentive to local residents and governments to cooperate in adding additional lands to the Forest Preserve."

Michael Washburn, RCPA's executive director, said the state should continue to pay the taxes.

"This approach will cost New Yorkers in the long-term by weakening the conservation efforts the state has made over the past century," Mr. Washburn said. "Our residents pay their fair share, so should the largest landowner."

The Common Ground Alliance, a grass roots group of "more than 100 local officials and leaders" sent a letter to Gov. Paterson on Jan. 8 protesting his proposal. The letter detailed basically the same concerns outlined by Mr. Lorey and Mr. Washburn.

But CGA also mentioned the Dillenburg vs. New York case in which a state court of appeals in Rochester overturned a challenge to the 1886 law.

In October, a four-judge panel ruled unanimously that the Legislature had legally waived state sovereign immunity in regard to being taxed by municipalities.

A north country senator also testified at Tuesday's joint public hearing.

"This is a bad idea and would set a terrible precedent," said Sen. Elizabeth O'C. Little, R-Queensbury, in a Tuesday press release.

"The state has an obligation to pay these taxes on behalf of all New Yorkers who benefit because an Adirondack Park exists. Everyone recognizes the severity of the state's fiscal crisis, but this proposal isn't calling for a shared sacrifice. It's calling for an unfair sacrifice to be made by Adirondack private property owners, many of whom are struggling to make ends meet."

In all, the proposal could affect $70 million in annual tax payments to 92 towns and 12 villages in the Adirondack Park. In the Catskill Park, the state pays approximately $30 million annually on 288,000 acres of land.

Today is the deadline for Gov. Paterson to offer 30-day amendments to his executive budget proposal, which he delivered Dec. 16.