Tax Watch columnist David McKay Wilson reviews attempts to bring equity to New York’s property tax system.
The push for tax equity in Westchester and Dutchess counties advanced last month in Albany with the state Senate passage of bills requiring New York to pay property taxes on all its property there, just as it does in Putnam and Rockland counties.
Neither bill, however, surfaced in the state Assembly, where they were stopped cold by Assemblywoman Sandy Galef, D-Ossining.
Fifteen years ago, Galef was a Putnam County hero when she sponsored the bill that taxed state land in Putnam, putting it on par with Rockland, resulting in an estimated $4 million annually to school districts, Putnam County and municipal governments.
But this year, as chair of the Assembly Committee on Real Property Taxation, Galef said she was inundated by bills to extend taxation to state lands around New York and that it would be unfair to do individual bills. Several bills were inspired by a 2016 Tax Watch investigation.
Galef also knew that Gov. Andrew Cuomo has no stomach for these one-offs. Cuomo in 2018 vetoed a bill that would have extended the taxation of state land in the Palisades Interstate Park from Rockland County into the park in Orange County.
“There’s got to be a statewide policy,” Galef said. “It can’t be one-by-one anymore.”
Galef added that the Putnam campaign 15 years ago was a grassroots effort that began in Philipstown, with Betty Budney, the late Philipstown Town board member, spearheading the effort. It gained the support of then-state Sen. Vincent Leibell and Gov. George Pataki, who lived in a 12-bedroom mansion on six-acres in Garrison, with a hefty property tax bill of his own.
“They had a huge campaign in Putnam and I joined the effort,” Galef recalls. “They were great citizen lobbyists. I haven’t seen a huge campaign in Westchester.”
Though the tax bill was included in Westchester County’s 2019 state legislative wish list, county leaders were focused on their successful campaign to win approval for an increase in the county sales tax.
State Sen. Peter Harckham, D-Lewisboro, who sponsored the Westchester and Dutchess bills, said he’ll reintroduce them in January.
“It’s not fair that taxpayers are subsidizing state lands while in other counties the state is paying its fair share,” Harckham said.
100 years in the making
The state’s ad hoc system on taxation of state land has developed over more than 100 years. While government land is typically exempt from taxation, New York has paid property taxes on its land in communities with huge swaths of state parkland, or those that host state prisons. About 90% of the state’s 4 million acres are taxed, with the remaining 10% scattered from Long Island to Buffalo.
For example, the state pays property taxes on all its 34,000 acres in Rockland and 25,000 acres in Putnam, but only about half its 20,000 acres in Dutchess County, and almost none of its 7,000 acres in Westchester.
This leaves the state paying property taxes in Putnam County on close to 300 acres of Donald J. Trump State Park to the Lakeland schools, Putnam Valley and Putnam County.
But there’s another 154 acres of Trump State Park in Yorktown for which the state pays no property taxes. Neither does it pay property taxes on about 1,700 acres at Rockefeller State Park Preserve in Pocantico Hills, nor 1,900 acres of state land at Camp Smith in Galef’s district in the town of Cortlandt and the Lakeland school district.
“I’ve had discussions with Sandy,” said Cortlandt Supervisor Linda Puglisi. “And we’ll lobby again next year.”
The only state land that gets taxed in Westchester lies in Galef’s hometown in Ossining, where about 80 acres by Sing Sing Prison and along the Old Croton Aqueduct State Park are taxed. It’s part of a special state law that taxes state land for school purposes in municipalities that host state prisons. The Ossining schools receive close to $1 million a year in revenue.
But there are two state prisons in Bedford, and the Bedford Central school district doesn’t receive a cent.
Among the proposed laws left languishing in Galef’s committee was a bill proposed by Assemblyman David Buchwald, D-White Plains, which would treat state land in Bedford as it’s treated in Ossining.
Galef agrees with Cuomo that there needs to be a statewide solution, but doing it all at once could prove too costly, with a 2018 state report estimating it would cost $350 million to pay property taxes on all state land.
Galef’s proposed first step at statewide equity began with municipalities that host state prisons. There are 19 prison towns that receive state property tax payments for schools, like Ossining, but 34 others that do not. Her bill to treat them all like Ossining failed to attract a state senate sponsor.
Her latest idea would phase in uniform taxation of all state land, beginning with payments of 10% of the property-tax bill on the newly taxed state land. That would cost state taxpayers $35 million, which Galef said would be a start. It would ramp up 5% a year over the next 4 years.
“Let’s see where the five-year plan goes,” she said. “It would be across-the-board. And almost everybody would be helped.”
Contact Tax Watch columnist David McKay Wilson on Facebook or Twitter @davidmckay415.