By JIMMY LAWTON

Nearly 40 percent of St. Lawrence County’s assessed property value is tax-exempt, but the situation is even worse for many of the area’s most-populated municipalities like Canton, Potsdam, Massena and Ogdensburg.

In Canton, 66 percent of the assessed village’s assessed property value is not taxed and 49.5 percent of the town’s value is exempt from taxes.

About 68 percent of Potsdam Village’s property is exempt, while 47.2 percent of the town’s total value is untaxed.

In Massena only 25.5 percent of assessed property value of the village is exempt, but in the town 68.7 percent of the total property value remains untaxed.

Ogdensburg’s total assessed value is estimated at $665,229,785, but only $270,973,370, or about 41 percent, is taxed.

Landowners who qualify for federal tax-exempt status don’t have to pay property taxes in all 50 states. They include churches, government-owned facilities and non-profit organizations.

The basic idea behind federal tax-exempt status is that institutions which theoretically contribute to the common good and lessen the burden of government, should not be required to contribute to costs for local services. But this creates problems for county government, municipalities and schools that provide services.

That’s especially true for communities where a major percentage of assessed value is exempt, which is often the case in St. Lawrence County, where the majority employers are government and non-profits.

According to records obtained through the county Real Property office, about 63 percent of the county’s total assessed value is taxed.

Tough Budgets

Canton Mayor Michael Dalton says tax exemptions definitely present difficulties when budgeting, but he says these entities also provide jobs and economic value to the village. As the county seat and home to two colleges, Dalton says the Canton area has a significant amount of tax-exempt property.

“Is it a problem? Sure. But it’s one we’ve learned to deal with. We budget within our means,” he said. “Canton wouldn’t be what it is today without the colleges.”

Dalton says that while major tax-exempt status holders like St. Lawrence University and SUNY Canton may seem like a burden, he says both institutions contribute to the community in significant ways.

“St. Lawrence University is actually one of the biggest contributors to property taxes,” he said. “But many people don’t realize it.”

Dalton said the problems related to untaxed properties are made bigger by the state, which pushes costs back on to smaller municipalities, which are in turn forced raise property taxes.

St. Lawrence County Administrator Ruth Doyle agrees. She said a large amount of tax-exempt property effectively reduces pool from which property taxes are collected. However, the burden becomes crippling for the county because the majority of its expenses stem from services and programs it is required by the state to fund.

Major expenses pushed on to the counties by the state include Medicaid, public assistance for families, indigent defense, child welfare and preschool special education.

According to Doyle, the county has very little control of spending, because more than 90 percent of money raised by taxes funds the mandated programs.

“It leaves very little room for us to make adjustments without increasing the burden on taxpayers,” she said.

While the county has less tax-exempt properties than a few other counties in the state, a 2010 report ranked St. Lawrence County at number four in terms of percentage of untaxed property value.

In the same report, Ogdensburg was ranked as the number one city for percentage of tax-exempt property. At that time, 64.5 percent of the city’s total property value was exempt from taxes.

More current rankings were not obtainable as of press time, but with few major employers left in the area, Ogdensburg remains in a similar spot today.

Addressing the problem

Ogdensburg City Manager Sarah Purdy has looked at establishing payment-in-lieu-of-taxes agreements with area non-profits, but it’s hard to convince an entity that isn’t required to provide taxes to chip in. The exception to that rule is water and sewer fees, for which non-profits are required to contribute.

And Purdy said some municipalities have been successful in striking similar deals with fire and police services, which the city has discussed.

Doyle said the county has also been working to address the small tax-base dilemma.

The county has led the fight to shift indigent defense costs back to the state, which would reduce the local property tax burden by millions of dollars annually.

St. Lawrence County Chairman Kevin Acres also supported an amendment to the American Health Care Act that would have pushed the local share of Medicaid back to the state, a move that would have saved the county as much as $25 million annually. However, the AHCA failed to pass.

The county has made small gains at bringing more properties back on tax rolls. The county has been working with the environmental protection agency to test and cleanup properties so they can be sold at auction and taxed.

Gov. Andrew M. Cuomo has pushed for consolidation of local governments to reduce the tax property burden, but Doyle says mandated relief is needed to reign in property taxes.