As we heard yesterday, one state agency has already suspended its property tax payments, costing counties and schools millions of dollars. In this second part our two-part series, Brian Mann reports that local leaders across the region fear that their state property tax payments could also be cut.
When the Adirondack Park was created in the 1800s, the legislature mandated that Albany would pay full property taxes on all its land holdings in the region.
Each year, between 65 and 70 million dollars pours into the coffers of counties, towns and school districts.
Mid-morning, Newecomb school superintendent Skip Hults is walking the halls in his gorgeous, modern building.
There aren’t many kids in this tiny town – only about 55 local students – but New York state’s huge property tax payments keep Hults’ school going and thriving.
"The bigger portion of our budget would be money we get because we have so much state land," he says.
"If we lost that tax money because of the Adirondack Park, we would not be able to continue."
Newcomb's school district receives $2.5 million per year in state property tax payments.
A state Comptroller’s report issued last week found that the district was spending roughly $60,000 dollars per student – roughly five times the national average.
And Newcomb isn’t alone.
School districts across the Adirondacks rely on those state property tax dollars to survive. "For our school district, it exceeds 40% of our revenue," says Mark Brand, superintendent at Indian Lake Central School in Hamilton County.
But New York state faces a ten billion dollar budget deficit next year. The Hudson River Black River Regulating District has already suspended property tax payments because of its own budget crisis. And local leaders like Brand worry that the problem could spread.
"With the state's economic situation, I think that's driving a lot of decisions in the state that make us uncomfortable here locally."
Brand says it's not a question of whether the state is willing to pay but rather "their ability to continue to fund their share of the property taxes in the area."
In all, Hamilton County receives between 15 and 20 million dollars a year in state property tax payments – for a population of just 5,000 people.
Bill Farber heads the county board of supervisors. Farber see these payments as basic fairness. If the state buys up all that land and blocks future development, it’s only reasonable that Albany pay full property taxes.
But Farber agrees political pressure to limit those payments will be intense.
"At the end of the day, you'd have to be delusional not to have fears about that, in the context of the budget crisis that the state has gone through," he said.
Last year, the Paterson administration proposed a cap on property tax payments for forest preserve lands in the Adirondacks and the Catskills.
The move would have stripped nearly five million dollars a year in funding – an $800,000 hit to Essex County alone.
That idea sent shockwaves through the North Country. "You could do nothing more damaging than capping state tax payments to those Adirondack communities," said Neil Woodworth head of the Adirondack Mountain Club.
"This would really hurt our efforts to improve the economy in the Adirondack Park," he added.
The idea was defeated in Albany. But Hamilton County’s Bill Farber worries that it could come back again with Governor Andrew Cuomo.
"It wasn't a new idea when the Paterson administration rolled it out," Farber notes. "It was something gthat the original Cuomo administration talked about. The Pataki administration talked about a different form of payment."
Asked if the state would propose cutting its property taxes next year, a spokesman for the state Budget Office sent a statement that read:
"The Office of Budget is always examining potential items for upcoming State budgets, but it will be up to Governor Elect Cuomo and his administration to determine whether to consider the particular measure you’re asking about.”
State Senator Betty Little says she thinks the issue will resurface – especially as other programs – including funding for schools in other parts of the state — are squeezed and cut.
"I think the Budget Office and those who are trying to come up with a balanced budget are going to look at that and say, 'Why is one school spending that much money." And if it's coming fromt he state forest preserve [propert taxes], which the majority of it is, they're going to say, 'We are paying for that.'"
The proposal to cap state property taxes in the Adirondacks was defeated last year and stripped from Governor Paterson’s final spending plan. Little says the fact that Republicans will be back in the majority in the state Senate means she’ll have a better chance of fighting any proposed cuts next year.
"Just having two parties involved and two viewpoints involved will help bring a balance to the budget and to what gets cut," Little said.
Hamilton County’s Bill Farber says a broad coalition of local government leaders, environmentalists and business leaders will work to keep those property tax payments off the chopping block.
"But frankly it becomores more and more challenging to make the arguments that differentiate this from a lot of other tough cuts that are being made," Farber said.
Governor-elect Cuomo has already signaled that he’ll be eyeing other possible budget cuts in the Adirondacks, from state prisons to Sunmount in Tupper Lake.