Appeals court OK’s Forest Preserve taxes
By Jim Planck
MOUNTAINTOP — A Rochester-based state appeals court has issued a ruling that clears the way for New York State to continue paying taxes on its Forest Preserve parcels to its host communities.
The state’s tax practice had been ruled “arbitrary” last year by a lower court, based on a lawsuit filed back in the Gov. George Pataki administration, and if it had stood would have cost municipalities substantial tax dollars.
In Greene County alone, the state owns 79,213 acres, and — for example — paid a total of more than $2.2 million to local coffers in 2002, which included about $1.4 million for school taxes, $456,000 for the county itself, $364,000 to the towns, and another $64,000 for special district taxes.
At the town level, a more recent example is provided by Greene County Treasurer Willis Vermilyea, who said that the Town of Hunter’s most recent tax payment from the state for its Forest Preserve lands was $157,396.
That amounts to more than 9 percent of the town’s 2008 total tax levy of approximately $1.7 million, and is thus not an insignificant source of revenue to potentially lose.
The lawsuit that started it all was filed by a former town supervisor from western New York, in the Town of Arkwright, Chautauqua County.
Although the town does not have any Forest Preserve lands, it does have the Canadaway Creek State Wildlife Management Area (WMA), a 2,080 acre recreational open space preserve, which offers hiking, hunting, fishing, and related outdoor opportunities.
At about 22,000 total acres in the entire town, the WMA’s 2,080 acres is almost 10 percent of the lands available, but the state does not pay taxes on WMA’s, so Arkwright receives no direct dollars for its presence.
Additionally, the roads accessing the WMA are reportedly town-maintained, which means Arkwright incurs the road upkeep cost of the traffic going to the WMA.
As a property owner, NYS has the same rights as any other property owner, requiring a municipality to maintain existing road access to its parcels, so there is no availability for a town to use road maintenance as a funding leverage either.
The case hinged on an alleged unfair distribution of state tax payments, in that the state paid some municipalities for its lands, but not others, including Arkwright.
The matter worked its way up through the lower courts over the years, and last November, the plaintiff — John C. Dillenburg III, who through 2003 was Arkwright’s supervisor for 12 years — got a favorable ruling from the State Supreme Court which essentially said the tax payment process was “arbitrary and capricious,” a “hodgepodge” of state laws, and “devoid of any consistent rationale.”
Unfortunately for all municipalities that do receive tax payments from the state, that same ruling also ordered the state to stop paying taxes on all its lands.
The ruling did, however, also include from that same judge an immediate “stay,” thus allowing tax payments to continue while appeals were made, which was then done by the Office of State Attorney General Andrew Cuomo this past summer.
Filing court briefs in support of the appeal were the governments of the nine Adirondack Park counties, as well as numerous outdoor and open space groups, including the Adirondack Mountain Club (ADK), the Open Space Conservancy, and the Catskill Center for Conservation & Development.
Friday’s ruling by the Appellate Division of New York State Supreme Court, 4th Department, reversed the previous decision because a municipality can only tax the state if it gives its consent, which NYS did for all current and future Forest Preserve lands back in 1886, the year after the State legislature created the Forest Preserve.
Since it has not given its consent for the Canadaway Creek lands, there is no requirement to force it to do so.
Dillenburg’s lawsuit reportedly followed more than a decade of trying to work with the state to get about $24,000 in annual payments-in-lieu of taxes (PILOTs) for the WMA through the State Legislature and/or the Governor’s office, but to no avail.
It is unclear whether PILOT funds have occurred elsewhere for non-Forest Preserve lands through legislative funding.
The court’s decision to dismiss the lawsuit has been hailed by open space and outdoor groups for its economic benefit, and as removing a potential obstruction to state acquisition of lands for protective and recreational purposes.
“This is a major victory,” said ADK executive director Neil Woodworth, “for those who live, work and recreate in the Adirondacks and Catskills.”
“The state Forest Preserve, which protects more than three million acres of wild lands in the Catskills and Adirondacks, is an important asset to all New Yorkers,” said Woodworth, “and the fiscal burden of maintaining these lands should be shared by all New Yorkers, and not fall on the shoulders of a few.”
Catskill Center for Conservation & Development executive director Lisa Rainwater also praised the outcome.
“We are very pleased with the judge’s ruling,” said Rainwater.
“It is significant,” Rainwater said, “to keep the tax dollars flowing in the Catskill communities that have state lands within their boundaries for economic stability.”
“It also reaffirms the state’s responsibility to pay taxes to communities that have a significant amount of state lands within their boundaries,” she said.
To reach reporter Jim Planck, call 518-943-2100, ext. 3324, or e-mail email@example.com.