Property Rights Foundation of America®

Dillenburg v. State of New York,
Threat to Adirondack Tax Base

By Peter La Grasse, Chairman, Bd. Of Assessors
Town of Stony Creek
March 3, 2008


Like most of the towns within the Blue Line, Stony Creek benefits from the tax on State-owned Land. Section 532 of the Real Property Tax Law (RPTL) provides that "All wild or forest land owned by the state within the forest preserve…shall be subject to taxation for all purposes." This provision of law has now been invalidated by a Supreme Court decision, Dillenburg v State of New York, that has found that there was no reasonable justification for allowing taxation on some State-owned land and not on other State-owned land. In the Dillenburg case, the supervisor of the Town of Arkwright sued the state because its small state-owned wildlife management area did not receive state taxes. The court reasoned that taking the RPTL as a whole, the exemption/non-exemption system of taxation is haphazard, and that there is no legitimate governmental purpose served in perpetuating it. The key that the court comes to is that the plaintiff has not been treated equally, and because his town does not receive taxes on State-owned land, no other town should. (See Dillenburg v. State of New York, Supreme Court of New York, Chautauqua County 2007 N.Y. Misc. LEXIS 8568; 238 N.Y.L.J. 112)

This paper will examine the historical foundation for the law allowing taxation of the state-owned land of the Adirondack Preserve (and by extension, the taxation of the state-owned land of the Catskill Preserve), the court decision that invalidated RPTL Section 532, and an analysis of the flaws in that court decision, and the perils in reversing that decision.

The Historical Basis for Taxation of State-owned Land in the Adirondacks

The Forest Preserve was created in 1885 by law to include state land within Warren County and 10 other counties, and by 1890 parts of two other counties were included. This state interest in a defined region of the Adirondacks did not come out of the blue. In 1884 a "Special Committee on State Land in the Adirondack Region" reported to the Senate, in essence, the need to protect the area from destructive practices of lumbering, and that the only areas left with dense forests were more than six miles from streams capable of carrying logs to market. (1884 Senate Document # 23)

"From Lake George your committee proceeded by way of Luzerne, and the valley of the Upper Hudson to the North Creek, the head of the Adirondack Railroad. The banks of the upper Hudson, for forty miles, were strewn with logs stranded since the spring freslets. At times thousands of fine spruce logs could be seen heaped in groups along the river bed." (1884 Senate Document # 23, p.7)

The Assembly recognized the need to protect the State-owned forests as a watershed. (1883 Assembly Document # 130) The report to the Assembly recognized the value of spruce to create a thick water-absorbing layer of mulch 3 to 4 feet thick, controlling spring thaw flooding. Their concern was controlling the potential flooding along the Hudson River, and then the drying up of the Hudson.

"Sand bars and other obstructions will be found to have formed in the bottom of the rivers from the detritus washed down by the floods from the tributary streams and their navigation hopelessly destroyed. Even the capital of the State will become an inland town, and New York cease to be the greatest city of the New World… The waters of the Hudson were lower last season than they were ever known to be before. All this the wisest and most scientific men in the State attribute to the destruction of the natural forests along her sources." (1883 Assembly Document # 130, p.4)

This report proposes a bill to allow the

"governor to authorize the appointment of a commission of three citizens…for the purpose of preserving and protecting the volume of water in the streams of the State, shall carefully inquire into the extent, nature and location of the forests of the state, and make a detailed report of their investigation to the next legislature." (1883 Assembly Document #130, p.5)

In 1884 the Legislature authorized a new commission to investigate the subject of forest preservation. This commission was appointed by Comptroller Alfred C. Chapin and headed by Professor C.S. Sargent of Harvard University and three other prominent experts, and known as the Sargent Commission. (The Constitutional History of New York, Charles Z. Lincoln, Vol. III p. 411-412 and 1885 Assembly Document #36 complete report 57 pages)

"This commission made a very important suggestion in relation to taxes, which was afterward incorporated in the statutes, namely, that the state "bear taxes upon its land in the Adirondack region…State land acquired in this region was to be held for the benefit of the people of the state; in many localities it would constitute a material part of the taxable property of a township, and, if withdrawn from taxation, the owners of the remaining real estate in the town would be obliged to bear all the expense of public administration, including the maintenance of the highways, local courts, and officers, all to be used in connection with the protection of the public domain; and the state should, therefore, bear a proportion of the expense of the 'local administration whose benefits it receives.' " (The Constitutional History of New York, Charles Z. Lincoln Vol III p. 416-417)

Underlying Legal Principle Used by Court

The U.S. Constitution's Fourteenth amendment guaranteeing equal protection of the law is one of the legal principles upon which the Dillenburg case rests. The second legal principle is derived from the Foss decision of 1985, treated in depth in the next section. The equal protection of the law has allowed for reasonable classifications for taxation so long as the classifications rest on a difference having a reasonable relation to the subject of legislation to the end that all persons similarly situated are treated alike. (Suglove v Oklahoma Tax Commission 1979 Okla 6051 2d 1315) (This and the next citation from USCS, Constitution, Fourteenth Amendment)

Another case to elucidate this principle is Genesco Inc v Woods (1979 Tenn 578 SW 2d 639.) This decision held that the test of whether a tax statute violates equal protection is whether the statute rests on a reasonable basic, and a statute will not be held discriminatory if there is any possible reason or justification for its passage.

The court acknowledged these limitations in the Dillenburg case in the application of the Fourteenth Amendment, relying on the case Foss v City of Rochester, where the court said "a classification (for the purposes of taxation) violates equal protection guarantees if the distinction between the classes is 'palpable arbitrary' or amounts to 'invidious discrimination.'"

The court acknowledged the underlying historical rational of the state in paying taxes on the Forest Preserve, but the court rejected these legislative purposes, the underpinning of RPTL Section 532, because the court found no difference between the wildlife management area in Arkwright and the Adirondack Forest Preserve. Dillenburg 1

(To aid in tracking the principles of law being applied, I set up a number system, Dillenburg#, Dissent # the same number under Dissent refers to the dissent opinion of then Chief Justice Wachtler in the Foss case to which the Dillenburg case follows nearly point for point.)

The court in Dillenburg asserts that "the expansion of taxing authority to include State-owned land in more and more communities while continuing the exemption for State-owned land with the same characteristics or the same use to other communities (such as the Town of Arkwright where Plaintiff resides), divorces the rational relationship from any legitimate state purpose." Dillenburg 1,3,4,5 & 6 The court continues, "there must also be a rational reason for deliberately imposing the demonstrable different tax burden on similar property because of the different geographical location", again citing the Foss case. Dillenburg 2

The court then rejects the grand scheme of the State in acquiring and preserving the watershed for the Hudson River and the watershed for the reservoir for New York City, and implies that the Canadaway Creek State WMA in Arkwright is proportionally equal. Hence, Arkwright not receiving State taxes violates the Fourteenth Amendment and it is illegal for the Adirondacks to receive State taxes. Dillenburg 1,3,4,5 & 6

You just have to refer to your road atlas to see the absurdity of the court's contention that the Adirondack Forest Preserve and the Catskill Forest Preserve are in any way similar to the Town of Arkwright's WMA. On the one hand, in the case of the Adirondacks and Catskills, I believe the legislative purpose is to protect one of the greatest cities and rivers in the entire world. This interest is vital for the interests of the State of New York. On the other hand, Arkwright's WMA is far from reaching a level of statewide concern. The legislature decided that one purpose (watershed) reached the level of state importance for taxes to be paid, while the other purpose (wildlife management) did not. The circumstances in this case are not equal, and the court misuses the constitutional provision of equal protection. The court's wording of "more and more", a clear reference to the State's acquiring more and more Adirondack Forest Preserve land subject to state taxes does not enhance the Town of Arkwright's supervisor's argument. Arkwright's WMA is totally isolated from any other State-owned land, and not a consolidated grouping of large tracts of land as in the Adirondacks, which form a consolidated whole, to which there is a recognizable State purpose. The court's decision avoids the simple fact that the purpose for which the legislature has stated it was allowing taxation of Forest Preserve lands stands alone as fully legal, and clearly is not the purpose of Arkwright's WMA. The question to be decided is: does the principle of equal protection of the law require the Legislature to grant taxes to all lands owned by the state simply because it chose to allow taxing land it owns for one specific purpose?

An In Depth Look Into the Court's Decision

Regardless of all that has been said here, the issue is not fully developed without going further and evaluating the case of Foss v City of Rochester (65 NY2d 247). This is the landmark case decided in 1985 concerning a complex subject of the different tax rates applied to houses (homestead property) and to businesses and vacant lots (non-homestead property) in the City of Rochester and the County of Monroe. The principles applied in this case are being applied by the Dillenburg court on a statewide basis.

Briefly, the City of Rochester had a revaluation of assessment. A common result occurred; the houses went up and the businesses went down, and taxes were slated to shift to residences. To offset this effect, the city instituted a "homestead" category to the tax roll, providing for a lower tax rate for houses, a higher tax rate for businesses. This, in effect, negated the assessment revaluation. This was done by provision of law.

The problem that arose was not with the city tax levy, but with the county tax levy. Within the city boundary the county tax was also proportioned higher for businesses, lower for residences. Now the county also levied taxes to other areas of the county outside of the city. These other jurisdictions chose to not proportion business tax rates higher and residences lower; they had the same tax rate for both classes. Foss sued on the basis that his property within the City of Rochester was taxed by the county at a higher tax rate then similar property outside of the city but within the county.

The court ruled in Foss that the application of the homestead/non-homestead scheme of different tax rates was illegal, and the quotes the Dillenburg court used, that the similarly situated properties were treated differently follows from the Foss case.

Of course, the big question that comes up is whether the small WMA in the Town of Arkwright near Lake Erie is similar to the Adirondack Forest Preserve, which is the watershed to the Hudson River. That aside for now, the Foss decision was a very contentious one, with a split vote of 4 against 3, and it is the dissenting opinion that may shed light on the future of appeal in our case.

Chief Justice Wachtler wrote the dissenting opinion. He was joined by Justices Jansen and Alexander. None of these judges presently sit on the present Court of Appeals; in fact the only judge remaining from that 1985 decision is now Chief Justice Kaye.

The dissenting opinion is to be studied because it is a study on what was the court precedent and where the court is now going, which 22 years after Foss has resulted in the Dillenburg court declaring a 122-year-old law is now unconstitutional.

Dissent 1 Judge Wachtler, in answer to the majority's approach in addressing the "incidental disadvantage to which non-homestead property owners would be subject in the allocation of the county's tax burden" is that the court's "role in such cases is merely to determine whether, taken as a whole, such legislation bears a relational relation to the achievement of a legitimate governmental purpose." (Board of Educ. v Nyquist 57 NY2d 27 appeal dismissed 459 US 1138) Emphasis added.

Judge Wachtler is responding to the majority's objection of a perfectly valid law, the application of which results in a minor discrepancy. The majority spent 9 pages of the published decision to analyze the taxes. Within the city of Rochester, non-homestead property paid 13.09% more, homestead property 13.09% less. Elsewhere in the county they were no differentiation of the tax rates, I surmise. So the plaintiff could say the county tax rate within the city was 13.09% more than similar property's county tax rate outside the city. Judge Wachtler says it is an incidental disadvantage, forget it, look at the whole picture, quit nit picking; but in more judicial language. He says: Dissent 1 "That such legislation may, in whole or in part, result in 'ever a flagrant unevenness' is immaterial." (Matter of Long Is. Light Co. v State Tax Commn., 45 NY2d 529, 535), and Dissent 2 "legislatively drawn geographic distinctions in taxing legislation provide no basis upon which to sustain a constitutional challenge." (Matter of Colt Indus. v Finance Administrator, 54 NY2d 533. 544; Equitable Life Assur. Socy. v Finance Admin., 459 US 983) Emphasis added.

Dissent 3 "In striking down so much of article 19 as produces the intraclass disparity, the majority disregards the strong presumption of constitutionality all statutes enjoy, which may be overcome only by proof of unconstitutionality beyond a reasonable doubt" (Lighthouse Shores v Town of Islip,41 NY2d 7, 11-12), as well as Dissent 4 "the special deference with which the courts must review legislative judgments in the area of taxation" (Board of Educ. V Nyquist, Supra; Matter of Long Is. Light. Co. v State Tax Commn., Supra).

Dissent 5 "By ignoring these well-established principles of judicial review, the majority today signals an unprecedented willingness on the part of this court to examine all the possible incidental effects of legislation challenged on constitutional grounds, a task we have declined to undertake in the past".

Dissent 1 In City of Rochester v West (164 NY 510, 514), we held "the validity of a statute or ordinance is not to be determined from its effect in a particular case, but upon its general purpose and its efficiency to effect that end" (see also, Lang's Creamery v City of Niagara Falls, 224 App Div 483, 487, affd 251 NY 343; City of Rochester v Gutberlett, 211 NY 309, 316; 20 NY Jur 2d Constitutional Law, Sec 70 at 139).

Dissent 1 In a situation involving a statutory prohibition of what were legislatively perceived to be unhealthy work practices, we declined to examine whether, as an incidental effect of the legislation, some unobjectionable practices would be prohibited as well, holding: "A legislature must legislate in general terms, and its mandates are not constitutionally vulnerable because having power to act concerning a certain subject and to legislate in terms reasonably calculated to accomplish the general purpose within the scope of its authority, it covers and prohibits some isolated transaction which by itself would be harmless and unobjectionable" (People v Schweinler Press, 214 NY 395, 407, appeal dismissed 242 US 618; emphasis added).

Dissent 6 "The result of this unprecedented scrutiny would be an unwarranted, and I believe unconstitutional, usurpation of the Legislature's authority to act in the area of taxation, an area in which it, not the judiciary, possesses the necessary expertness and accountability to the public which in the end are far more effective than overly oppressive judicial oversight to assure fairness in the levying and exaction of taxes." Emphasis added.


The appeal of this decision will probably cover all of the points I have covered here. I think Chief Judge Wachtler's dissent in Foss is especially telling and prophetical to our current predicament. Since 1885, the needs of the state for watershed protection of the Hudson River, and for water supply for its cities along the Hudson River have only increased. We have touched on farsighted planners who envisioned the growth of one of the greatest cities in the world, New York City. Regardless of the environmental shift from 19th century conservation to 21st century preservation, the needs of the Hudson River and the cities along it remain true to the 1885 vision of watershed protection. The court will be asked to see that this is, today, a statewide objective, and that the comparisons made in Dillenburg based on Foss are invalid. And then the other side will say some of the Adirondack Forest Preserve is not Hudson River watershed, in fact it drains North to the Saint Lawrence River. They will say it was acquired for wildlife management and is no different than the Canadaway Creek WMA in the Town of Arkwright. Our side might cite the 1885 Assembly Document 36, the Sargent Report, which says, in part: "Upon this general plan, the State lands in the Adirondacks are to be hereafter held and acquired, not for the especial benefit of the counties in which they lie, but in a much greater degree for the benefit of the whole State" (p. 24); It is only after the most careful and prolonged consideration that the commissioners have concluded to recommend that the State hereafter bear taxes upon its lands in the Adirondack region.(p. 23) It is any guess how the Court of Appeals will respond to this.

Back to:
Government Land Acquisition Real Estate Tax and Assessments - New York PRFA Home Page

© 2008 Peter J. LaGrasse
All rights reserved. This material may not be broadcast, published, rewritten or redistributed without written permission.