Absence of PILOTs on State-Owned Land and Community Residences PDF Print E-mail

The Mandate: Pursuant to Real Property Tax Law § 404, property owned by the State of New York, or any of its departments or agencies, is generally wholly exempt from taxation. Current law includes an inconsistent and inequitable patchwork of provisions that, for certain state property, requires a PILOT payment. Due to the ad hoc nature in which policies and programs concerning state-owned land have been developed, similar properties may generate significantly different payments, or in some cases, no payments at all.   In addition, community residences for the developmentally disabled are a responsibility of the whole State.  However, these facilities are not always evenly distributed among municipalities, and as a result, certain municipalities bear a disproportionate burden of these tax-exempt properties.

The Cost: In 2009, there were 19,369 property tax exemptions granted on state-owned property, totaling $82.6 billion in exempt full value. Municipalities with large concentrations of tax-exempt property must continue to provide essential municipal services despite their compromised tax base. According to data collected by the NYS Office of Real Property Services, in the City of Ogdensburg alone – where 64% of the full value of the property is exempt – the 24 exemptions granted on state-owned property in 2009 amounted to more than $294 million in exempt full value, or approximately 39% of the City’s total tax base. Exempting property from taxes does not diminish the need for those lost tax revenues; it simply shifts the burden of generating those revenues to the remaining taxpayers in the community.

The Solution: Enact legislation establishing a uniform requirement for the State to make PILOT payments on state-owned land and buildings in an amount equal to a fixed percentage of the lost tax revenues. Also require PILOT payments from the State on tax-exempt community residences for the developmentally disabled.