Towns must take the lead in restoring tax rolls

By IRA COHEN

Currently, Sullivan County properties with a total assessed value of $200,000,000 are under litigation, either for tax exemptions or for reduced assessments. Towns in Sullivan County must take the lead in restoring such properties to the tax rolls, whenever the law mandates such action. The Town of Tusten’s recent actions enabling the properties of the Gurdjieff Foundation to become tax-exempt demonstrate this contention.

New York State law mandates that town assessors be responsible for assessing real properties and determining their taxable status. The assessor’s determinations affect not only the town’s taxes, but those of the county, school districts and special districts within the town as well.

The Gurdjieff Foundation owns several hundred acres in Tusten (only a portion of an $8,000,000 portfolio in New York State alone). The properties were exempted by the town from 1998 through 2007, purportedly as an “educational facility.” Except for once a year, when lessons in music, dance, art, batik and such are made available to the general public, the activities of the facility are available only to members, particularly those involving the teachings of the philosophy of George Ivanovich Gurdjieff, a Greek-Armenian mystic who preached self-improvement.

In March 2007, I discovered that the foundation was not paying hotel occupancy taxes to the county, in violation of our local law that taxes guests of tourist-related facilities. The Gurdjieff director advised me that the town had always exempted them from real property taxation, and when I asked the Tusten assessor for an explanation his reply was: “It’s not my problem. They were exempt when I became assessor and I renew it every year.” What he didn’t tell me was that the foundation paid the town $6,000 annually to keep the exemption.

I tried to convince town officials that their exemption was unwarranted because the foundation was not a true educational facility, but to no avail. Assistant county attorney Charles Olsen and I were able to find court decisions and statutory law to prove that the foundation was not an educational facility under state law, and received confirmation from the Commissioner of Education in Albany.

On April 1, 2008, we elicited sworn testimony of a foundation official, in the presence of the town’s attorney. Shortly thereafter, we met with town officials for over an hour and urged them to terminate the exemption, which the town’s attorney agreed was unwarranted. On May 1, 2008, the foundation’s properties were restored to the taxable portion of the 2008 assessment roll.

Unfortunately, immediately thereafter, town officials made a deal with the foundation that enabled it to regain its exemption, while not providing a single penny for the county, nor the Sullivan West school district.

On June 2, 2008, I unsuccessfully pleaded with the town board to require the foundation to prove its entitlement in court; however they adopted a resolution, by a 3-2 vote, to enter into a five-year agreement with the foundation in exchange for a continuing annual exemption wherein the town would receive a $10,000 annual payment. The town conceded, in writing, that the foundation’s use of the property constituted an exempt use, not as an educational facility, but one for moral or mental improvement. The town had no legal authority to deny its board of assessment review of its sole decision-making authority.

Tusten officials said they were afraid to challenge the foundation in court for fear of losing its annual payment, and wouldn’t commit funds to pay an attorney, even though the county and the school were willing to join as partners.

Towns have a legal and moral duty to act in the best interest of all taxpayers rather than selfishly make private deals with property owners that benefit only the township. Otherwise, they could deprive counties, schools and other tax districts of tax revenue, while imposing additional burdens on their taxpayers. The law does not permit this one-sided conduct.

Laws and court decisions will never be changed if we are afraid to challenge them, and the towns, as the assessing units, must lead this fight. Sullivan County and, in this case, the Sullivan West school district, have made their commitment clear. We must work together to share our knowledge and resources to urge the courts to restore properties to the tax rolls, and to narrow the applicability of state laws that permit unwarranted exemptions.

(Ira Cohen is the treasurer of Sullivan County.)