County Scores Big Win In Legal Action vs. State

By Chris English

SCHOHARIE COUNTY – New York State's current process for assessing the values of solar and wind energy facilities for taxation purposes is unconstitutional, state Supreme Court Judge James Farrell concluded in a March 3 decision and order filed with the Albany County Clerk the next day.

The ruling represents a significant victory for county Supervisor Donald Airey of Blenheim and his colleagues on the board, who filed the action in April of last year against the state, Governor Kathy Hochul and the state Senate and Assembly. Airey and many others have long contended that the discounted assessments for such renewable energy facilities results in unfair and inequitable property tax proceeds for towns, the county and school districts.

And while the decision was welcomed by Airey and other county officials, just how big a victory it represents has yet to be determined, noted Airey, who has dedicated a big part of his life over the last few years to the effort.

"It's been about a two and half or three-year struggle," said Airey in an extensive telephone conversation with this newspaper on Tuesday. "Am I happy with this? Yes, but what would make me even happier is if the governor and the legislature would stop laying the burden of their climate agenda on upstate communities."

He added that he feels it's likely the respondents-defendants will appeal the state Supreme Court ruling to the appropriate appellate court. The gist of Farrell's ruling is the "Legislature has abdicated its constitutional responsibility and has delegated its taxing power to an administrative agency (the state Department of Taxation and Finance) in violation of the New York State Constitution. Accordingly, the court finds that (the applicable law) is unconstitutional."

However, Farrell's decision rules against other aspects of the Article 78 action brought by Airey and the other plaintiffs-petitioners.

"Petitioners' first, third and fourth causes of action are dismissed for lack of standing and the motion is otherwise denied," the judge stated. One of the reasons for his "lack of standing" assertion is that the Town of Sharon is currently the only county municipality with a large solar power facility. The state Office of Renewable Energy Siting is expected to issue a final permit within the next few weeks or months for the 20MW Rock District solar energy facility in Carlisle and Seward.

The March 3 decision comes three years after a group of state municipalities won a favorable decision and temporary injunction against the then-current system for taxing solar and wind facilities. However, the legislature essentially "mooted" that decision by voting to pass Real Property Tax Law 575-b, the one currently being challenged by Airey and the other plaintiffs.

In the legal challenge, they contend that "assessors have the ultimate authority to select the appropriate method for assessing and valuing property within their jurisdictions and the Legislature cannot impose a specific formula or methodology thereby curtailing the judgment of assessors.

"The statute is arbitrary and capricious because it shifts the tax burden from solar and wind energy systems to petitioners and other taxpayers within the tax levying jurisdiction and/or results in a cut in local government services to offset the loss in tax revenue caused by implementation of this model."

Airey and others who have fought this fight say they aren't looking for solar and wind energy facilities to be assessed at full value but for a reasonable compromise that results in towns, the county and school districts receiving their fair share in taxes from such facilities. One solutilon, he reasoned, is for taxing jurisdictions to negotiate PILOT (Payment in Lieu of Taxes) agreements with solar and wind energy developers.

As an example of the unfairness of the current assessment method, Airey estimated that the 50MW East Point solar energy facility in Sharon results in $400,000 in annual taxes spread between the town, county and school district. If assessed at full value, the facility would result in a total of about $3.5 million in annual tax revenue spread among the three jurisdictions, he estimated.

For the entire state, loss of total tax revenue from solar and wind energy facilities under the current assessment methodology would be somewhere around $1 billion over the next 25 years, Airey said.

"This is a step in the right direction," he said of Farrell's ruling. "In a perfect world, we would come to the table and conclude this current formula results in too heavy a burden for most taxpayers. I'm not against renewable energy, but the way it's being deployed is just awful. It's absurd. This is not a NIMBY (Not in My Backyard) thing. This is a pay me thing. The towns need this revenue."

Nevertheless, Airey and other county officials hope that Farrell's ruling favorable in one big way for them can help result in a more equitable system moving forward.

"I am very proud that Schoharie County and the 16 towns took on the state without any assistance from other counties, and we prevailed," county Board of Supervisors Chairman Bill Federice of Conesville wrote in an email to this newspaper.

The state attorney general's office, which represented the respondents-defendants in the matter, did not return a phone message from this newspaper seeking comment.