PROPERTY RIGHTS FOUNDATION OF AMERICA, INC.
P.O. Box 75, Stony Creek, New York 12878 - 518/696-5748
Founded 1994

The right to own private property is a fundamental American freedom that
guarantees personal liberty and promotes economic prosperity.

 

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E-mail: prfa@prfamerica.org

February 12, 2009

Dear Friend:

Here's a simple rule with a lot of meaning for rural landowners:

"Save the Tax Base, Protect the Future."

For over two decades I have argued that we must contain government landownership in rural communities if there is to be a local economic future.

I have maintained a stance that seems subtle to many people, but has stared us in the face for these decades in Stony Creek in northern New York.

Everything that my husband Peter and I have learned in this regard is applicable in a broader sense to rural communities throughout the United States. So I hope that you will be interested in the situation that we face today in New York's North Country and will see that the important principles are absolutely basic.

The principle that I want to illustrate is this:

If the local people cannot keep landownership in private hands, they will have lost control over the tax base and be forced to engage in pitched battle into the indefinite future to defend their tax base.

Whether these defensive battles take place 75 years, 100 years or even 125 years into the future, the importance of decisions in "year one" to the local economic future is paramount.

In 1885, the New York State Legislature established the State Forest Preserve, which included 750,000 acres of State-owned land in the Adirondack Mountains in Northern New York. At the time, land in parts of the Adirondack Mountains supported subsistence farming, where every sort of production took place from grain to fiber to butter, but a great deal of land was simply logged for its rich timber and then deserted by the owners. These lands had provided the beautiful timber for New York's burgeoning population, but the lumbering practices at the time had left large areas of the land stripped of the forest covering.

The logging had an impact on the established commerce of New York State where shipments came from the Midwest to Buffalo and then through the Erie Canal and down the mighty Hudson River to New York City. With the forest mulch greatly reduced by the radical harvesting practices of the time, the land no longer had the ability to act as a great sponge and hold water for gentle release after the spring melts.

Instead of a measured release from the spring through the summer, the spring brought excessive flow in the streams that fed the Erie Canal and Hudson River and the summer left the Erie Canal in a state that at times it had to be closed to navigation, while the flow in the Hudson was so reduced that the saline front from the Atlantic was moving upstream at an alarming rate.

Along with remote virgin forest, the State acquired the deserted, relatively bare, mountains and collected them to re-establish the forest for a future watershed bank to provide the flow needed for commercial navigation. During the early 1880s, the State Legislature commissioned studies to determine the future of these forestlands.

The testimony of the forward-thinking state officials and prominent experts from the beginnings of the field of forestry was recorded in the official legislative records, which Peter and I were able to study under the tutelage of the librarian at the New York State Legislative Research Library at the Capitol.

In a report commissioned by the Legislature in 1884 the Forestry Commission made recommendations for the system of management of the three-quarter million acres that the State had acquired in the Adirondacks.

As they contemplated the future of the lands in a large new State Forest Preserve, the Commission discussed the question of payment of real estate taxes to the local towns. Of course, the State's sovereignty exempted it from payment of local real estate taxes.

Today, the State's impact on the local tax structure in the Adirondacks is all-pervasive. This likelihood was foreseen approximately 125 years ago, when the Legislature was looking into the future and developing this first Forestry Commission in the United States to manage its impressive and growing forestland holdings.

The Commission was concerned about the fairness of taking this great amount of land out of the local economy.

Below are three short excerpts from the 55-page report, where the policy of the State paying taxes on its land was discussed in depth, and the Commission unanimously concluded that the State should pay taxes on the land that it acquires in the Adirondacks. The conclusions of the Commission were adopted by the Legislature shortly thereafter.

"Ultimately, therefore, there will probably be the position of the State holding a large part of the property in the Adirondack towns which would normally pay taxes, and this holding would be chiefly for the benefit of the rest of the State."

"It is not unreasonable, therefore, that the State should, up to the extent of taxes upon the lands which it holds in these counties, bear a proportion of the expenses of local administration whose benefits it receives."

"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."

Report by the Forestry Commission to the Hon. Alfred C. Chapin, Comptroller of the State of New York pursuant to Chapter 551 of the Laws of 1884, to "investigate and report a system of forest preservation." (Documents of the Assembly of the State of New York, 1885, No. 36)

On January 23, 1885, the Comptroller submitted the report of the Forestry Commission to the Assembly of the State of New York, and its recommendations formed the basis for the laws protecting the lands acquired by the State in the Adirondacks and for establishing that the State would pay real estate taxes to the local governments

The Forest Preserve has grown like a conquering monster during the past 125 years, gobbling up areas where there were little farms and villages, pastures and woodlots, vacation spots and hunting camps, mines and railroad routes, vast estates, and timberland that provided sustainable logging.

Today, the Adirondack and Catskill Forest Preserves comprise approximately 3,000,000 acres of State-owned "forever wild" land, of which somewhat less than 300,000 acres are within the Catskill preserve. In addition, the State owns roughly 700,000 acres of conservation easements on land in the Adirondacks, on which, by recent statute, it also pays the large share of the taxes because it owns the development rights.

Private land in the six-million acre Adirondack region defined by a "Blue Line" that now delineates a state zoning agency established in 1973, has diminished to approximately half the total acreage, with that 700,000 acres of conservation easements further subtracting from developable land.

State tax policies affecting this proportion of land in such a vast region are of paramount impact.

This year is the year that the covenant that the Legislature made with the people of the Adirondacks may be broken.

Nearly a century and a quarter after the state established its policy of paying local real estate taxes, State payments of taxes to localities on the State-owned lands are threatened. In the face of pressing fiscal deficit, Governor David A. Paterson has proposed saving $9 million by imposing a "cap" on State payment of real estate taxes to localities in the Adirondack and Catskill Forest Preserves for the fiscal year beginning in 2009.

At the same time, the Governor has proposed to spend millions of dollars more to buy up land in the Adirondacks. The budget proposal before the Legislature is to spend $58 million of $205 million in the Environmental Protection Fund for land acquisition, of which a large portion would be used to continue to buy timberland holdings that The Nature Conservancy acquired of the Glens Falls paper manufacturer Finch, Pruyn and Co.

Giant industrial timberlands of Champion International, International Paper, and now Finch, Pruyn, are being acquired by the Conservation Fund and The Nature Conservancy, split into tracts to become "forever wild" Forest Preserve or conservation easements, and flipped to the State of New York. These productive tracts are gradually ceasing to be held privately except for the residual value where conservation easements are split off to prohibit development. The State pays lucratively for fee simple lands it acquires, as well as for the conservation easements. The State's policies for payment of real estate tax policies on these lands are in the control of the Legislature.

If the Legislature, both houses of which have a majority of the same party as the Governor, adopts the policy that the Governor recommends to cap State payments of real estate taxes on Forest Preserve lands, the taxes now paid by the State on these will gradually shift more and more to the local towns, gradually making the real estate taxes unaffordable and forcing local people to sell their property. A gradual exodus will result. Land, already excessively restricted by the state regional zoning agency and in short supply because of the vast tracts taken off the market by state ownership, will become even more unaffordable. The competition for the highly taxed land with people who make their livings out of the deliberately depressed region will be even more keen and even fewer people who make their livings locally will be able to stay in the North Country.

The present threat posed by the proposed cap on State payment of real estate taxes for the New York State Forest Preserve exemplifies the power that preservationist-oriented government landownership poses to any locality.

If the environmental preservationists can get control of the tax base of your community or region, they have the power to control—or foreclose—the future of your community.

Whether you live in the Adirondack Mountain region of New York, or anywhere else in the state or nation, the experience in upstate New York right now is a lesson for you.

Significant government land ownership means government control of the tax base.

Here in the North Country, I have argued for decades that we must stop State land acquisition because of the disastrous economic and social impact. Two reasons seal this impact:

  • When the land becomes "forever wild" Forest Preserve protected by the State Constitution, never to be logged or developed again, or is acquired in fractional title as conservation easements and perpetually closed to development, there can be zero or very limited economic growth.
  • The State Department of Environmental Conservation, which owns the land, has the power at any point to use its limitless legal resources to battle local real estate tax assessments,* and the Legislature has the power, also at any time, to simply rescind the nearly 125-year old legislation waiving its sovereignty and establishing a policy of the State paying taxes on the land.

Government landownership is such a fundamental threat to the local economic future that it should be on the mind of every person who sees the state or federal government acquiring land in the region where that person lives. We often speak of the foreclosing of the economic future that results from the loss of use of the land as it shifts into preservation and cannot be used for resource-based production or for development. We should never forget that the sovereignty of the state and federal governments means that these levels of government have no constitutional obligation to pay local taxes.

Payments in lieu of taxes can be rescinded. Payments based on forest harvests can be reduced or ended, whether by using a ploy such as the preservation of endangered species to close down logging or by passing laws that change the payment policies. And state governments as landowners are not less threatening than the federal government. Because they are sovereign, they do not have to pay taxes.

No covenant, no matter how sacred, no matter how fairly intended by people of a by-gone time when a pledge was the same as the most high quality collateral, is worth anything to the mean-minded preservationist enemies of local rural communities who may someday exploit an issue to implement their designs through an even-handed, but preoccupied governor.

Please support the work of the Property Rights Foundation of America, Inc., as we stand uncompromisingly for the belief that the land, with the traditional exceptions, belongs in private ownership.

This work to preserve private landownership is part of our sacred trust in these days. I am humbly indebted to you for your commitment and generosity.

Sincerely,

Carol W. LaGrasse
President

*A note of explanation. Fighting the State as it tried to avoid paying a fair assessment of its land value has played a significant part of the occupation of Peter La Grasse, who has been the chairman of the local Stony Creek Board of Assessors since 1976 and has twice fought successfully in court the State's efforts to pay less than its legal share of local real estate taxes.

A copy of the latest annual financial report of the Property Rights Foundation of America, Inc. may be obtained from the organization
or from the Office of the Attorney General, Charities Bureau, 120 Broadway, New York, N.Y. 10271.

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