Paterson tax plan could hurt communities in Catskills and Adirondacks, some leaders say

ALBANY — Local government leaders and environmentalists say communities across New York would be devastated by Gov. David Paterson’s proposal to cap property taxes paid on state-owned land.

Paterson’s 2009-10 budget proposal to cap tax payments at 2008 levels hits hardest in the Adirondacks and Catskills, where the state owns millions of acres. But it applies to certain state-owned land from Long Island to Jamestown.

John Sheehan, spokesman for the Adirondack Council, said the proposal would be especially harsh for communities in the Adirondack Park where as much as 90 percent of land in some towns is state-owned.

“We’re dead set against the governor’s proposal,” Sheehan said Friday. “We’re working with more than 100 local governments in the Adirondacks and Catskills to fight it.”

In a letter dated Jan. 12, members of the Tug Hill Region Councils of Governments in central New York asked Paterson to reconsider his executive budget proposal to amend Section 544 of the real property tax law to cap the state’s payment of taxes on certain lands across the state.

The proposal would save the state $9 million in the 2009-10 fiscal year and $16 million in 2010-11, said Jeffrey Gordon, spokesman for the Division of Budget. He said local governments could minimize the impact on private landowners by finding ways to cut municipal spending.

“Given the state’s fiscal situation, Governor Paterson has proposed to reduce spending or maintain it at current levels in every area,” Gordon said. “At a time when the state is experiencing a dramatic decrease in revenues, the governor has called on all entities, including local governments, to also find ways to reduce spending.”

Local governments are still trying to quantify the impact the proposal would have. In 2008, the state paid $69 million in local taxes on its 2.7 million acres in the Adirondack Park and 288,000 acres in the Catskill Park. That’s up from $48 million 10 years ago, Sheehan said.

In the Essex County town of Newcomb, which has fewer than 500 year-round residents, 84 percent of land is owned by the state. Town officials say a freeze would mean that a 5 percent increase in town spending would trigger a 31 percent jump in the tax rate paid by private property owners.

“I think it’s a horrible mistake,” said Bill Farber, chairman of the Hamilton County Board of Supervisors. “This is not a model of shared sacrifice. This is a huge shift of the burden to the local taxpayers in the park.”

State Sen. Betty Little, a Queensbury Republican, said the proposal calls for an unfair sacrifice by Adirondack private property owners, many of whom are struggling to make ends meet.

Little was among Adirondack officials signing a letter from the Common Ground Alliance, an ad hoc group that urged Paterson to drop the idea.

“Private individuals living on tight budgets don’t have the option of deciding how much property tax they pay, and neither should the state,” the Jan. 8 letter noted.

Environmental groups fear that if the state backs out of its promise to pay the same amount of property taxes as private landowners do, opposition will increase to state acquisition of pristine land tracts for preservation.

“We’re concerned that there would be a drumbeat for lifting the forever wild restrictions on forest preserve so towns could make money on it,” Sheehan said. “Taxes have been a form of insulation for the forest preserve, relieving local pressure to develop land and easing opposition to additions being made to state holdings.”

Sandy Galef, chairwoman of the state Assembly’s property tax committee, said she would recommend a one-year cap on the property taxes paid by the state, rather than a permanent freeze at the 2008 level.