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Department of Taxation and Finance

Compensating Local Governments for Loss of Tax Base Due to State Ownership of Land

September 1996

V. FISCAL IMPACT

Introduction

The amount of state compensation payable to localities under the proposed PILOT program can be estimated using the acreage of state property shown on local assessment rolls. In the remainder of this section, estimates based on 1993 assessment rolls are presented. These figures must be regarded as tentative because acreage and property use codes may have been incorrectly recorded for some parcels on the rolls. Were the proposed program to be implemented, more accurate determinations would have to be made since large amounts of state revenue would be at stake.

Because the recommendations made regarding the proposed PILOT program (see Part M stop short of specifying the actual dollar amount per acre that would be paid to localities, the estimates given in this section provide a range of possible compensation scenarios rather than a single version. Obviously, the scenario chosen and compensation paid would depend on the available state funds. All compensation scenarios presented in this section share the feature that each local government is guaranteed the amount (taxes plus PILOTS) received in fiscal 1994, even though its payments as calculated under the new program might in some cases be smaller.

PILOT Program Compensation Costs

Tables 12 through 14 present the estimated PILOT payments that would be made annually to local governments based on three assumed compensation schedules reflecting the fixed payment per acre concept recommended in Part IV of this report. The schedules compare the total payments that would be made to the local governments in each county under the new program with those made under the existing tax and PILOT programs.

The first schedule, as reflected in Table 12, is the simplest of the three alternatives. Under this option, each local government unit would receive one dollar per acre of eligible of state-owned land. Since this compensation level is quite low compared to existing levels in nearly all areas of the state, the great majority of local governments would receive compensation based on the 'hold harmless" level of fiscal 1994. However, those communities having eligible state land but currently receiving no taxes or PILOT payments would now receive one dollar per acre for each local government unit within whose boundaries the land is located. It is thus apparent that this version of the program would cost the state more that the current programs, since all would be guaranteed at least as much as is currently paid, and some could receive more if the new payment exceeded the old one.

The added cost to the state of this version of the program, based on 1993 assessment roll acreage, would have been approximately $694,000. This represents a relatively small increase (0.9 percent) over the total compensation paid under the current programs. The number of local governments receiving compensation payments would increase substantially, however, with counties increasing from 26 to 58, cities/towns from 428 to 781, school districts from 284 to 481, and villages from 21 to 126 (see Table 15). All told, a total of 1, 446 taxing units would receive payments, almost twice as many as receive them under current law (759).

As is to be expected, most taxing units that are currently receiving payments would continue to receive the same payment under the "hold harmless" feature, because their existing payment level exceeds one dollar per acre. In this category are 23 of the 26 counties, 363 of the 428 cities/towns, all 21 of the villages, and 270 of the 284 school districts. The largest beneficiaries of this version of the program would be those areas of the state with a high ratio of currently exempt land to currently taxable land (e.g., Suffolk, Columbia, and Onondaga Counties), and/or rural areas where land values are relatively low and where the currently taxable land may not be taxable for all purposes (e.g., Jefferson and St. Lawrence Counties).

Although this type of compensation program is simple, it may not adequate reflect the differential "cost" of exempt state land to different kinds of taxing units. Some taxing units, such as school districts, are particularly dependent on the property tax base, and their tax levies comprise the largest share of most tax bills. It may therefore be more appropriate to compensate taxing units in proportion to their shares of local property taxes rather than on an equal-payment-per-acre basis.

Table 12
Projected Payment Under PILOT Program Based on $1 per Acre per Taxing Unit
County Total Payment* to Taxing Units Net Increase
County City/Town Village School All Units
Albany $8,814 $125,172 82 $9,529 $143,596 $14,800
Allegany 9,819 159,837 913 290,319 460,888 11,682
Broome 2,567 17,642 0 124,984 145,193 2,902
Cattaraugus 328,931 249,291 0 732,547 1,310,769 2,585
Cayuga 5,257 23,566 167 29,030 58,021 13,394
Chautauqua 6,109 39,149 39 80,374 125,671 12,087
Chemung 1,550 2,491 0 3,788 7,829 4,051
Chenango 127,259 354,113 0 770,901 1,252,273 0
Clinton 103,648 196,474 0 553,983 854,105 3,611
Columbia 7,810 10,132 1 22,995 40,938 20,623
Cortland 13,444 75,440 0 23,459 323,143 19,748
Delaware 153,400 163,230 174 299,832 616,636 4,718
Dutchess 6,806 6,806 65 701,729 715,405 17,848
Erie 1,389 1,746 0 8,607 11,742 7,466
Essex 1,668,032 2,962,236 12 5,062,803 9,693,084 69
Franklin 759,604 712,213 2 2,840,659 4,312,478 387
Fulton 799,845 273,146 18,116 1,011,932 2,103,039 4,454
Genesee 7,192 7,192 0 4,190 18,574 18,574
Greene 239,937 256,664 3 544,954 1,041,558 642
Hamilton 1,340,556 3,643,354 134,968 4,155,316 9,274,194 0
Herkimer 1,556,325 670,782 4 2,441,520 4,668,631 396
Jefferson 36,138 41,840 168 91,952 170,098 66,645
Lewis 123,271 265,897 16 532,548 921,732 1,604
Livingston 13,582 25,922 186 114,621 154,310 27,314
Madison 7,049 91,664 35 176,911 275,659 10,541
Monroe 3,762 3,762 17 30,646 38,187 11,091
Montgomery 1,510 16,303 252 61,012 79,077 3,906
Nassau 1,234 1,234 382 1,373 4,223 4,223
Niagara 6,333 6,333 1 4,530 17,196 17,196
Oneida 20,699 95,528 56 902,779 1,019,061 10,188
Onondaga 26,731 31,408 384 67,701 126,225 78,867
Ontario 3,661 3,661 0 58,812 66,134 8,349
Orange 399,129 617,929 1,267 1,014,551 2,032,876 8,536
Orleans 1,040 1,040 2 6,399 8,481 3,707
Oswego 28,725 88,175 2 111,569 228,471 16,176
Otsego 6,882 62,274 0 104,017 173,173 6,809
Putnam 55,113 76,400 1,773 268,232 401,518 0
Rensselaer 31,024 39,776 0 110,177 180,977 2,784
Rockland 988,413 2,238,670 151,596 9,056,129 12,434,808 0
St. Lawrence 378,940 765,276 180 1,201,394 2,345,790 28,773
Saratoga 221,081 147,322 50 432,779 801,232 5,987
Schenectady 1,252 1,252 0 2,289 4,792 3,788
Schoharie 2,226 145,337 0 372,917 520,480 2,226
Schuyler 6,343 78,447 568 58,831 144,188 15,966
Seneca 3,574 3,574 62 17,060 24,270 9,028
Steuben 9,947 66,089 3,714 210,751 290,501 16,862
Suffolk 32,665 32,665 346 8,145,930 8,211,605 95,416
Sullivan 97,920 101,047 5 1,324,443 1,523,415 10,069
Tioga 1,334 45,530 1 139,380 186,245 1,938
Tompkins 10,001 73,675 0 116,036 199,713 13,932
Ulster 584,499 1,058,368 0 1,735,259 3,378,126 685
Warren 285,778 1,211,952 0 2,845,677 4,343,407 19
Washington 419,358 224,689 1 867,841 1,511,890 977
Wayne 6,058 6,058 14 6,614 18,743 18,743
Westchester 3,820 55,576 487,992 111,809 659,197 10,906
Wyoming 7,902 7,902 0 24,177 39,982 18,996
Yates 33,810 34,967 0 1,209 69,986 1,465
New York City n/a 234 n/a 234 468 468
STATEWIDE $11,009,097 $17,718,452 $803,615 $50,252,839 $79,784,003 $694,216
*For each taxing unit, total payments can not be less than payment received in 1994 fiscal year.

The next scenario presented (Table 13) reflects this approach. It also assumes that there is considerably more state funding available for the proposed PILOT program than assumed under the previous scenario. Under this version, a total of $ 10.00 per acre would be expended by the state on compensation payments, with local governments once again being "held harmless" if their current compensation payments are higher. The total payment of $10.00 would be apportioned among the different types of local governments according to their current statewide shares of the overall property tax rate. Schools would thus receive $5.60 per acre; counties and cities/towns $2.00 each; and villages $0.40. This level of compensation is about half the average per-acre compensation paid to all taxing units combined in fiscal 1994 ($19.73) and more than twice the median of $4.33 paid in the typical municipality. (The average is much higher than the median because some municipalities received very high per-acre payments, see Table 9.)

As can be seen in Table 13, this compensation scenario would cost about $5.1 million more than the existing tax and PILOT programs, an increase of approximately 7.2 percent. Once again, the number of taxing units receiving payments would nearly double, to 1,446. The largest shares of the additional payments would go to taxing units in Adirondack-area counties (e.g., Hamilton, Herkimer, Jefferson, Lewis, St. Lawrence), where the average payment per-acre is currently below $10.00 in many cases. Suffolk County taxing units would also be ma or beneficiaries, again due to the large exempt acreage in that area of the state. Other counties in the New York City metropolitan area (e.g., Putnam, Rockland) would see no increases in payments because the taxes or PILOTs they receive under current law substantially exceed $10.00 per acre. As is apparent in Table 15, the number of taxing units being paid under the proposed "hold harmless" provision would be smaller under this scenario than under the previous one-dollar-per-acre option.

A third and final version of the proposed PILOT program is shown in Table 14. In this scenario, the state would pay local governments a total of $20.00 per acre, approximately the same level of compensation paid on the average acre under current programs ($19.73). The payment would again be apportioned according to the same tax rate shares used in the previous example (schools, $11,20; counties and cities/towns, $4.00 each; and villages, $0.80). This Table 14 program would cost an additional $27.2 million, or about 34 percent more than current programs. The largest beneficiaries would once again be the Adirondack-area counties, primarily because they have large acreage of currently taxable state land on which the taxes amount to considerably less than $20.00 per acre. Suffolk County would receive almost $0.6 million for its predominantly tax-exempt acreage, and a significant number of rural/forested counties in various areas of the state would also receive substantially higher compensation payments due to the fact that their existing compensation, if any, is substantially less than $20.00 per acre. The only county receiving no additional funds under this scenario is Rockland, where all land is taxable and payments under current law amount to nearly $335.00 per acre. Table 15 indicates that, under this payment scenario, only 249 of the 1,446 taxing units receiving compensation payments would have the payments calculated under the "hold harmless" provision of the PILOT program.

Table 13
Projected Payments Under PILOT Program Based on $10 per Acre Apportioned
Between Taxing Units (School, $5.60; County, $2.00; City/Town, $2.00; Village, $0.40)
County Total Payment* to Taxing Units Net Increase
All Units
County City/Town Village School All Units
Albany 17,627 $ 134,018 $33 $50,383 $202,060 $73,264
Allegany 19,638 166,265 365 32,381 514,650 65,444
Broome 5,134 20,153 0 127,295 152,582 10,291
Cattaraugus 328,931 291,857 0 770,287 1,391,074 82,890
Cayuga 10,514 28,911 67 64,235 103,727 59,100
Chautauqua 12,218 50,630 16 119,280 182,142 68,558
Chemung 3,100 4,135 0 8,223 15,459 11,681
Chenango 127,259 365,244 0 779,344 1,260,716 8,443
Clinton 114,580 209,249 0 594,386 918,215 67,721
Columbia 15,621 17,237 1 54,012 86,870 66,555
Cortland 26,888 89,190 0 256,729 372,808 69,413
Delaware 153,400 189,644 70 360,048 703,182 91,264
Dutchess 13,611 13,611 26 720,918 78,167 50,610
Erie 2,778 2,778 0 36,546 42,101 37,825
Essex 1,688,032 2,967,354 5 5,208,450 9,843,840 150,825
Franklin 759,604 723,985 1 2,873,804 4,357,383 45,302
Fulton 799,845 299,106 18,116 1,046,431 2,163,499 64,914
Genesee 14,384 14,384 0 23,463 52,231 52,231
Greene 239,937 260,073 1 544,954 1,044,965 4,049
Hamilton 1,566,080 3,653,354 134,968 4,841,274 10,185,677 911,483
Herkimer 1,556,325 721,794 1 2,622,042 4,900,163 231,928
Jefferson 72,275 82,688 67 278,034 433,044 329,591
Lewis 144,928 319,187 12 784,171 1,248,297 328,169
Livingston 27,164 38,053 74 151,461 216,752 89,756
Madison 14,099 89,734 14 200,414 313,260 48,142
Monroe 7,524 7,524 7 46,978 62,033 34,937
Montgomery 3,020 17,955 101 64,496 85,571 10,400
Nassau 2,469 2,469 153 7,686 12,776 12,776
Niagara 12,666 12,666 0 25,366 50,697 50,697
Oneida 36,412 125,844 22 916,174 1,078,453 69,580
Onondaga 53,462 57,860 154 200,650 312,126 264,768
Ontario 7,321 7,321 0 69,580 84,223 26,438
Orange 399,129 624,692 1,267 1,035,278 2,060,366 36,026
Orleans 2,080 2,080 1 13,875 18,036 13,262
Oswego 57,451 105,828 1 247,331 410,610 198,315
Otsego 13,764 66,660 0 115,325 195,749 29,385
Putnam 55,113 76,400 1,773 268232 401,518 0
Rensselaer 31,024 44,020 0 122,190 197,234 19,041
Rockland 988,413 2,238,670 151,596 9,056,129 12,434,808 0
St. Lawrence 378,940 827,454 72 1,461,806 2,668,272 351,254
Saratoga 221,081 153,848 20 445,376 820,234 25,079
Schenectady 2,504 2,504 0 8,197 13,205 12,201
Schoharie 4,452 145,337 0 372,917 522,706 4,452
Schuyler 12,686 86,047 227 90,174 189,134 60,912
Seneca 7,148 7,148 25 25,423 39,745 24,503
Steuben 19,894 78,251 3,712 254,019 355,876 82,237
Suffolk 65,330 65,330 138 8,282,738 8,413,536 297,347
Sullivan 97,920 117,203 2 1,365,792 1,580,917 67,571
Tioga 2,668 46,220 1 142,143 191,031 6,724
Tompkins 20,003 83,705 0 149,166 252,874 67,093
Ulster 584,499 1,058,743 0 1,736,977 3,380,219 2,778
Warren 381,499 1,212,294 0 2,845,765 4,439,558 96,170
Washington 419,358 225,329 1 870,685 1,515,372 4,459
Wayne 12,115 12,115 6 37,037 61,273 61,273
Westchester 7,640 58,540 487,804 129,324 683,308 35,017
Wyoming 15,805 15,805 0 58,350 89,960 68,974
Yates 33,810 37,385 0 4,448 75,643 7,122
New York City 0 468 0 1,311 1,799 1,799
STATEWIDE $11,671,171 $18,364,216 $800,917 $53,315,503 $84,151,805 $5,062,018
*For each taxing unit, total payments can not be less than payment received in 1994 fiscal year.

Table 14
Projected Payments Under PILOT Program Based on $20 per Acre Apportioned
Between Taxing Units (School, $11.20; County, $4.00; City/Town, $4.00; Village, $0.80)
County Total Payment* to Taxing Units Net Increase
All Units
County City/Town Village School All Units
Albany 35,254 151,710 65 100,765 287,795 158,999
Allegany 39,276 221,413 731 621,454 882,873 433,667
Broome 10,268 39,348 0 170,058 219,674 77,383
Cattaraugus 328,931 439,663 0 1,156,044 1,924,639 61,455
Cayuga 21,029 52,932 134 128,470 202,565 157,938
Chautauqua 24,435 86,041 31 238,560 349,067 235,483
Chemung 6,200 8,271 0 16,447 30,917 27,139
Chenango 127,259 373,848 0 860,776 1,361,883 109,610
Clinton 229,160 272,171 0 942,970 1,444,301 593,807
Columbia 31,241 33,741 1 103,542 168,525 148,210
Cortland 53,777 156,966 0 437,738 648,480 345,085
Delaware 206,122 264,715 140 577,614 1,084,590 436,672
Dutchess 27,222 27,222 52 744,280 798,776 101,219
Erie 5,555 5,555 0 70,559 81,670 77,394
Essex 2,098,006 3,272,415 10 6,807,823 12,178,253 2,458,238
Franklin 984,811 1,063,139 2 3,769,180 5,817,131 1,505,040
Fulton 799,845 460,103 18,116 1,539,447 2,817,511 718,926
Genesee 28,767 28,767 0 46,927 104,462 104,462
Greene 316,422 338,134 2 818,833 1,473,391 432,475
Hamilton 3,132,161 3,885,302 134,968 7,460,314 14,612,744 5,338,550
Herkimer 1,566,325 1,440,420 3 4,712,779 7,709,526 3,041,291
Jefferson 144,550 165,336 135 556,068 866,089 762,636
Lewis 289,855 598,391 14 1,568,341 2,456,602 1,536,474
Livingston 54,328 65,690 149 207,693 326,859 199,863
Madison 28,197 118,883 28 315,806 462,914 197,796
Monroe 15,049 15,049 13 66,859 96,970 69,874
Montgomery 6,039 32,797 202 91,348 130,386 55,215
Nassau 4,937 4,937 305 15,373 25,552 25,552
Niagara 25,331 35,331 1 50,732 101,395 101,395
Oneida 72,824 215,673 45 1,249,164 1,537,706 528,833
Onondaga 106,924 115,720 307 370,801 593,753 546,395
Ontario 14,643 14,643 0 101,255 130,541 72,756
Orange 399,129 639,274 1,267 1,060,510 2,100,180 75,840
Orleans 4,160 4,160 2 22,975 31,298 26,524
Oswego 114,901 176,687 2 424,661 786,251 573,956
Otsego 27,528 94,388 0 215,382 337,298 170,934
Putnam 55,113 76,400 1,773 301,286 434,572 33,054
Rensselaer 37,860 55,327 0 143,976 237,164 58,971
Rockland 988,413 2,238,670 151,596 9,056,129 12,434,808 0
St. Lawrence 739,421 1,112,135 144 2,251,985 4,103,685 1,786,667
Saratoga 221,081 183,739 40 493,768 898,627 103,382
Schenectady 5,007 5,007 0 16,005 26,020 25,016
Schoharie 8,904 150,446 0 423,855 583,205 64,951
Schuyler 25,372 104,584 454 155,476 285,987 157,765
Seneca 14,297 14,297 50 47,787 76,430 61,188
Steuben 39,787 118,970 3,713 437920 600,390 326,751
Suffolk 130,660 130,660 276 8,449,287 8,710,883 494,694
Sullivan 137,311 151,649 4 1,446,557 1,735,522 222,176
Tioga 5,336 52,031 1 201,476 258,843 74,536
Tompkins 40,005 116,105 0 277,358 433,468 247,687
Ulster 662,375 1,059,492 0 1,739,068 3,460,935 83,494
Warren 762,999 1,378,131 0 3,071,488 5,212,617 869,229
Washington 419,358 231,190 1 877,151 1,527,700 16,787
Wayne 24,230 24,230 11 74,075 122,546 122,546
Westchester 15,281 65,569 487,929 150,647 718,326 70,035
Wyoming 31,610 31,610 0 112,694 175,913 154,927
Yates 33,810 42,222 0 8,897 84,929 16,408
New York City n/a 936 n/a 2,621 3,557 3,557
STATEWIDE $15,768,692 $22,250,136 $802,715 $67,451,151 $106,272,694 $27,182,907
*For each taxing unit, total payments can not be less than payment received in 1994 fiscal year.

Table 15.
Effect of "Hold Harmless" Provision of
Proposed PILOT Program on Taxing Units, 1993 Assessment Rolls
  Counties Cities/Towns Schools Villages
Number of Taxing Units
Receiving Payments:


    Under Current Law
    Under Proposed PILOT
26
58
428
781
284
481
21
126
Number of Taxing Units
Protected by "Hold Harmless"
Provision Under Scenario:


    $1 per Acre per taxing unit
    $10 per Acre (apportioned)
    $20 per Acre (apportioned)
23
18
10
363
267
133
270
174
85
21
21
21

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