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August 30, 2014
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A new attempt to reign in tax exempts; carrying the issue to Albany


Several times over the decades, Sullivan County Legislators have tried to convince Albany to reign in the liberal laws regarding tax-exempt properties. A couple of times the state senate has passed legislation that would have eased the situation, but the effort has never succeeded in getting all three entities that must be on board—the senate, the assembly and the governor—on the same page.

The matter was broached again and a new effort was launched at a meeting at the government center on October 11. County manager David Fanslau said the total value of property in the county is $10.17 billion and, of that, close to $2 billion is exempt from property tax. “So, if you took all those exempt properties that are nongovernmental and they became subject to taxation, it would be an additional $7.4 million in tax revenue to the county,” which is equal to roughly an increase of 14% in tax revenues.

Lawmaker Cindy Gieger, who is spearheading the effort to bring a change to the tax-exempt laws, said the issue is one of the top two among county residents. She added that on a recent trip to the New York State Association of Counties convention, lawmakers from other counties expressed surprise that the percentage of tax-exempt properties here was so high, and that does not appear to be the case elsewhere. She said there were various factors that led to the situation, including the proximity to New York City and the fact that there are summer camps here.

She said she and county treasurer Ira Cohen were working on identifying other counties that may have similar levels of tax exemption that might join the cause. Cohen said he had been working on legislation that could be offered to lawmakers in Albany, who might then consider passing it.

County attorney Sam Yasgur said that when previous efforts had been mounted regarding reigning in the tax exempt laws, parties interested in maintaining the status quo, such as the Catholic Church, the Boy Scouts and the Hasidic community, have banded together to lobby against any change.

This time around, it was suggested that a law that would allow counties to set their own limits regarding which properties, or which parts of properties, may be exempted might have a better chance of passing than a state-wide change.

Lawmaker Alan Sorensen said that to have any chance of passage, a proposed law would have to exclude New York City, because the city would look at nonprofits, such as the universities and hospitals, as assets. Also, he noted, the city has an income tax through which it can raise revenues, which counties do not have.

Another way to attack the problem would be through the courts. Cohen said that at a meeting of 12 town supervisors the previous week, the supervisors all indicated they would be willing to work with the county to identify properties where the case for tax-exempt status might be weak, and then to take those cases to court.

Yasgur said that officials should be cautious in that approach because judges in local cases in previous years had ruled against local officials, and court rulings over the decades had expanded the definition of property and buildings that could be granted tax-exempt status.

Lawmakers agreed to take the matter up again next month and look at the proposed legislation that Cohen has put together.