Tax-exempt properties frustrate lawmakers

Old issue gets new attention


MONTICELLO, NY — Legislator Jodi Goodman said, “If Sullivan County residents get wind of this, the reaction could be explosive.”

She was talking about the controversy surrounding a grocery store, which has not yet been built, but which has been declared tax-exempt as part of a legal settlement between the county, the Town of Thompson and the Ichud Foundation, the Hasidic group that owns the former Ideal Bungalow Colony on Route 42.

The foundation filed in 2004 to make the property tax-exempt, and the town and county tried to prevent that from happening. Under the terms of a court-ordered settlement handed down in February, payments from the foundation will drop from $69,000 to $20,000 to the county, town and the Monticello school district. If the group builds a planned 6,000-square-foot grocery store, it will be also be tax exempt.

Additionally, there is also a side agreement between Thompson and the foundation that could raise the amount paid to the town. Ira Cohen, the country treasurer, is renegotiating the settlement to try to increase the payments to the county and school district. But at a recent meeting of the county real property committee, most of the comments centered on what the lawmakers consider to be injustices in the laws governing tax-exempt land in New York State.

Cohen said exemptions from religious and other nonprofit organizations have become very hard to deny, because “judiciary decisions over the past 50 years have made exemptions much broader.”

Sam Yasgur, the county attorney, agreed, saying, “each case pushes the boundary further.”

Goodman asked Cohen if he had tried to convince the Ichud Foundation to make higher payments simply “to be a good neighbor.” Cohen said he had used the “good neighbor language” to no avail.

Legislator Leni Binder said, “We’ve been trying to pass laws to change this for a dozen years. Take the Boy Scoutsūthey have land that’s exempt in New York that would not be in New Jersey.”

Paul Burckhard, the director of real property tax services, said he is slightly hopeful that some changes may be coming because there is now a “different public mood, and different people in the judiciary.”

County chairman Chris Cunningham said he has been active with the New York State Association of Counties (NYSAC) and the group is in the process of forming a task force to address the matter.

According to the website, there are 466 tax-exempt organizations operating in Sullivan County, with recorded assets of $437,261,414.

At the state level

New York State Senator John Bonacic has long been trying to work up momentum in Albany for reform of tax-exempt land laws. In the spring of 2003, Bonacic held a series of public hearings on the matter across the state. He has since been pushing legislation that, if passed, would accomplish the following:

· Provide definitions for commonly sought categories of exempt properties, including “moral or mental improvement of men, women, or children,” “charitable purpose,” “religious purpose,” “educational purpose” [and] hospital purpose.”

· Make it a local option to exempt properties from taxation when those properties claim an exemption based on providing for the “moral or mental improvement of men, women, or children.”

· Allow school districts to charge tuition for students who reside on wholly tax-exempt property.

· Place the burden of qualifying for tax exemption on the organization claiming the tax exemption, by requiring the organization to prove to the local assessor that the property is used exclusively for exempt purposes by clear and convincing evidence.

· Prohibit land-banking by requiring that when an exempt organization purchases vacant land, the organization develop and implement plans to utilize the land within two years of purchase.

· Provide for state reimbursement to localities with high percentages of forestland exemptions for lost taxes.