February 14, 2018
Hon. Andrew Cuomo, Governor
State of New York
Executive Chamber State Capitol
Albany, NY 12224
Dear Governor Cuomo,
We write to ask that you amend your proposed State Budget and legislative proposals in order to restore existing provisions of Real Property Tax law 534 and 542 that annually authorize the payment of ad valorem taxes to Adirondack and Catskill taxing districts hosting the NYS Forest Preserve.
The Executive budget proposes to change the current ad valorem tax assessments on Forest Preserve lands which are currently calculated by local assessors into a Payment in Lieu of Taxes (PILOT) at 2017 amounts. The Executive Budget property tax proposal imposes a tax cap on any increases in state tax payments at the lesser of the prior year’s inflation rate or two percent. In legal and practical effect, the state would be taking over the function of assessment of the value of state Forest Preserve land from local assessors and substituting a state imposed tax cap on the taxes it pays to communities.
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. Section 542 of the real property tax law (RPTL) states that the assessment of value of state forest lands made by the town assessors was binding and conclusive on the State Board of Equalization and Assessment (SBEA) in the same way that it would be binding on private property owners. See Section 542 of the RPTL and Town of Shandaken v. State Bd. Of Equalization and Assessment (3rd Dept., 1983) 97 A.D. 2d 179, affirmed 63 N.Y. 2d 442 (Court of Appeals, 1984). Section 542 and the Shandaken decision clearly limits the role of the SBEA in the valuation and assessment of state lands to “determination that the assessment made by the local assessors is in conformity with the applicable equalization rate. Authority for determination of valuation is vested in the local assessors.” See Town of Shandaken, 63 N.Y. 2d 442. The Court of Appeals opined that nothing in RPTL sections 532, 534, and 542 granted initial or final valuation authority to the State Board (SBEA). See 63 N.Y.2d at pg. 447.
The Executive tax freeze and proposed abandonment of ad valorem taxes on state forest lands and the proposed “tax cap” on the PILOTS is a complete departure from current statutory and case law. We believe that only the Legislature can enact such a radical change in the way real property taxes are determined for some 5 million acres of state forest land in over 50 counties in the state. Local government leaders are unified in their belief that this will cost communities millions of dollars in state tax payments and a massive shift of property tax levies on private property owners in those counties. ·
Since 1886, the RPTL has authorized the State to pay taxes on its Forest Preserve as if it were privately owned. Since all NYS residents benefit enormously from these “forever wild” state forests, it was thought then, as now, that all NYS taxpayers ought to share in full taxes to the hundreds of affected small towns and school districts in the Adirondack and Catskill Mountains.
Your proposal to cap these taxes at current levels, to increase the payments only according to a state determined growth factor and to consider these annual payments in lieu of taxes (PILOT), not an ad valorem tax for all purposes, will short change many Adirondack and Catskill communities. Many of these communities are comprised of more than 50% Forest Preserve. Fifty percent or more of their tax payments come from the State Land. In that eventuality, private landowners will invariably be asked to make up the difference through tax shifting.
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.
We respectfully request that you direct the Division of Budget to delete this PILOT and Tax Cap proposal from the Executive Budget’s Article 7 language within the period of the 30 day amendments. ·
Neil F. Woodworth