Gurdjieff tax deal nixed by court

County wins round against Tusten

By FRITZ MAYER

TOWN OF TUSTEN, NY — The court did not address whether the organization should be tax exempt, but it did say that the deal the town struck with the organization was not allowed.

The decision by the Supreme Court appellate division, which was handed down on April 29, overturned a decision by the lower court in February 2009, in which the judge dismissed the proceeding against the town.

The adversaries are the Town of Tusten and Sullivan County, and the agreement in question is one in which the town worked out an arrangement with the Gurdjieff Foundation whereby the foundation would pay the town $10,000 per year and, in return, the foundation would retain its tax-exempt status.

The case is one that county treasurer Ira Cohen has been interested in since 2007. At the time, he urged the town to support the idea that the organization should not have an educational tax exemption for its 160-acre parcel and buildings at the four corners in Beaver Brook.

The tax-exempt status was changed briefly in 2008 but, when the deal was struck, the tax exemption was put back in place. The problem from the county’s perspective is that the county and the Sullivan West school district were left out of the deal, and receive no payments from Gurdjieff.

In arguing the appeal, county attorney Sam Yasgur said that because the deal was outside of the framework for such arrangements that have been authorized by the state legislature, the deal should not be permitted.

In agreeing with Yasgur, the appellate court wrote, “While we ascribe no ill intent to the town in this case, we note that this type of agreement opens the door for potential abuse, such as a government authority wielding the weighty power of taxation to commandeer ‘contributions’ from entities that are exempt from real property taxes.”

Cohen still believes that Gurdjieff should not have an exemption, but that issue was not addressed by the court and it is not yet clear that the county will press the issue with the court, or how the town might respond. But Cohen said that even without that determination, “this decision has statewide implications for all municipalities that try to enter into these illegal agreements with organizations that claim they’re tax exempt; it’s not the way to settle these issues.”

Cohen added that former Tusten supervisor Ben Johnson had previously said that the town has made these agreements often, as had other towns. “Now, the court says they’re illegal.”

Jeffrey Clemente, the town’s attorney, said that the decision was not as significant as Cohen was making it seem, and that the decision doesn’t really alter the situation with Gurdjieff regarding its tax-exempt status. It’s not clear if Gurdjieff will continue making the yearly contributions to the town on a voluntary basis.

Clemente said, however, that having read the decision, he could see the point the court was making, and would advise the town to accept the decision.