X

Property tax exemptions law must be changed, says Potsdam resident

Posted 11/28/14

To the Editor: Around the year 1799, New York State leaders passed laws (RPTL 420) that stated that not-for-profit entities, such as hospitals, universities and religious orders could expand and …

This item is available in full to subscribers.

Please log in to continue

Log in

Property tax exemptions law must be changed, says Potsdam resident

Posted

To the Editor:

Around the year 1799, New York State leaders passed laws (RPTL 420) that stated that not-for-profit entities, such as hospitals, universities and religious orders could expand and operate free of taxation. This legislation was largely supported because at this time the State of New York was still being developed and explored. The statewide labor force was being utilized not only to create our infrastructure, but to simply survive in new and often hostile territory. This set of laws took pressure off our fledgling state and local governments, and in return gave not-for-profit hospitals and universities incentives to accomplish this work for themselves. It was a necessary law formed to ensure the survival and expansion of healthcare and education.

In 1949, a NY State Supreme Court ruling gave these laws even more muscle. It resulted from the case Clarkson Memorial College of Technology vs. Haggett (a Town Assessor from about 1943-47.) Clarkson was buying up residences in town and declaring them tax exempt due to the fact there was an influx of WWII veterans attending and teaching, and they did not have the housing available for these expanded numbers. The original ruling deemed the houses taxable, Clarkson appealed, and the court ruled that under the circumstances, these homes could be classified as exempt. Many municipalities fought this ruling for years after, stating that the housing problem ceased to exist. Clarkson University actually set this precedent, and to this day throughout New York State and the entire country, not-for-profit rental property remains exempt due to this dated court case.

Today, not-for-profit corporations still maintain a rate of 0% on these properties, yet the increase in taxation on private business and residents during this time has increased several hundred percent. In the past two years, Canton–Potsdam Hospital and Clarkson University have increased their residential, office and auxiliary real estate holdings by more than 50 million dollars, with more being bought and developed constantly. Canton-Potsdam Hospital (St. Lawrence Health System) recently acquired three parcels on Route 11 for $945,000.00. This is 145 percent more than its assessed value of $385,000.00.

Clarkson purchased land on Maple Street (RT 11) for $657,620.00. The assessed value of this was $205,100.00. If a not-for-profit can pay 220 percent more than a property’s face value, it can afford the taxes on its residential holdings.

While school officials say that the Gap Elimination Formula is the root of the Canton-Potsdam school funding issue, these laws that continue to exempt not-for-profit properties are hurting our schools as well. They have also indirectly raised our county sales tax, closed local businesses, raised the price of local gas and contributed to the demise of public programs like sports and recreation. This is because taxable property owners are paying an inflated tax rate in order to support (or subsidize) these exempt properties.

These laws must be modified. If you feel our elected officials should pass legislation that would require not-for-profit companies to pay property taxes on their rental holdings, please email this letter to our representatives at griffo@nysenate.gov, RussellA@assembly.state.ny.us, Ritchie@nysenate.gov and send this to Governor Andrew Cuomo, NY State Capital Building, Albany, NY 12224.

Peggy Brusso

Potsdam