Monday, August 9, 2010

Commentary: Forest Preserve – Forever Taxable?

The approximately three million acre, publicly-owned and “forever wild” NYS Forest Preserve in the Adirondack and Catskill Parks is taxable for all purposes. Since 1886, that’s been the law. How can we make sure such tax obligations are paid, forever? I want it that way, and so do many others.

The law says that Forest Preserve lands shall be valued for tax purposes as if privately owned (Section 532a of the Real Property Tax Law). Late 19th century lawmakers recognized that downstate economic and other benefits of protecting upstate watersheds in the Adirondacks and Catskills more than justified waiving the State’s exemption from being taxed. And thus it has been ever since.
Today, these are still the State’s greatest watersheds, filtering billions of gallons of water each day for practically nothing, and preventing flooding. New York City is, thus far, spared $5 billion in water treatment costs by the Catskill “forever wild” watersheds. The smallest Adirondack stream flows year-round because of the stable base flow guaranteed by forever wild policies. The recreational, wildlife, spiritual and other benefits of our wilderness, monetary and otherwise, are enormous. Spreading State Land taxes across every New Yorker who benefits from these wild forest lands, whether they actually visit them or not, still makes great sense. However, there are longstanding and short-term signs that this broad consensus and inviolable commitment to pay full taxes is fraying.

Simplistically put, each spring the State’s tax experts check the local assessors work and present the Comptroller with taxable assessed values on all Forest Preserve parcels in each and every taxing district. After applying a State equalization rate, the Comptroller sends out the checks. I believe that in 2008 the State paid a total of roughly $70 million in local taxes on all taxable Forest Preserve in Adirondack Park towns, up from $27 million twenty years earlier.

Longstanding tensions exist over who does the assessing of State Land. The State, by a 1984 Court of Appeals decision, is not legally entitled to assess them, the local assessor is. Yet, local assessors vary widely in their skills and application of the laws. They are supposed to assess all lands in their jurisdiction at the same percentage of full, or market value. That may not always happen. When State lands are assessed at lower percentage of full value than comparable private lands, the State must apply an equalization rate to the State Lands. By law, that rate must be the weighted average assessment ratio across all property types, which can force up the State Equalization Rate. State Land assessments can therefore rise faster than comparable private lands. Timber values are also fully assessed at the local level, despite the forever wild law. The State’s older forests have greater timber values, helping to boost State assessments.

The State can grieve their assessments, but it is politically tempting in tough economic times to object to rising State Land assessments by freezing or capping the State’s taxable assessed value or actual payments. Governor Cuomo tried the first approach in 1990, and Governor Paterson tried the second in 2009. Neither succeeded, fortunately.

The latest cap effort led to one of the greatest, strangest coalitions in memory. Supervisors, Counties, School Superintendents and Conservation Directors saw common ground, agitated and succeeded in stopping someone in green eyeshades from capping State taxes on State Land. Governor Paterson got an earful one day from this coalition. The Governor didn’t realize how much local governments relied on State tax payments. Forest Preserve constitutes more than 90% of taxable value in some towns, frequently more than 50%. Adirondack Wild’s Dan Plumley told the Governor that the entire globe was interested in the Adirondack Park, including how to pay for it; his efforts to cap tax payments would give the State a black eye internationally. Anyway, the tax cap disappeared, and the coalition cheered a hard won victory.

On the other hand, AdkAction sponsored a conference in 2008 to test its view that State Forest Preserve lands are valued inconsistently, and thus cause unfair rises in private taxable assessed values. Results of the conference seemed to verify inconsistent valuations for assessment purposes, but that the State paid more tax than comparable private land in some towns, less in others.

Town Supervisors and I might sleep sounder if the very State Constitution obliged the State to pay full taxes, not just the Real Property Tax Law. Forever Wild should also mean Forever Taxable. The typical response is that nothing, or nobody can bind State Legislatures, and State Budgets, not even shame, apparently, given the performance of our lawmakers in the last several years.

Perhaps the best answer to current uncertainty is to, once again, ensure that the State, and not the local assessor, determines Forest Preserve assessed values, which the State did until the 1984 Court of Appeals decision. Overturning that decision may be difficult, but doing so would ensure no State grievance at tax day, no equalization rates, and might mean less political pressure in Albany to cap State taxes.

A lot of what appears here, including my recommendation I credit to Jim Dunne, State Economist with the Commission on the Adirondacks in the 21st Century, from his easily read (but not necessarily well understood) technical report 29 titled “Significant Issues in Real Property Taxation in the Adirondack Park” (The Adirondack Park in the 21st Century, Technical Reports, Volume 2, 1989 by the Commission)

Photo: Over Mt. Colden, High Peaks Wilderness.

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David Gibson

Dave Gibson, who writes about issues of wilderness, wild lands, public policy, and more, has been involved in Adirondack conservation for over 30 years as executive director of the Association for the Protection of the Adirondacks, executive director of Protect the Adirondacks and currently as managing partner with Adirondack Wild: Friends of the Forest Preserve

During Dave's tenure at the Association, the organization completed the Center for the Forest Preserve including the Adirondack Research Library at Paul Schaefer’s home. The library has the finest Adirondack collection outside the Blue Line, specializing in Adirondack conservation and recreation history.

Currently, Dave is managing partner in the nonprofit organization launched in 2010, Adirondack Wild: Friends of the Forest Preserve.




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