Nathan Mayberg | Democrat
THE SULLIVAN COUNTY summer population enjoy passing time at bungalow colonies, like the bungalow shown above, however, the discussion on taxes and bungalow colonies is a discussion frequented here, by residents legislators who pay taxes.
Tax Exemption Has County, Town Wrangling
By Nathan Mayberg
MONTICELLO January 2, 2007 Sullivan County Treasurer Ira Cohen is calling a deal reached earlier this year between the Town of Thompson and Ichud Bungalow, as well as the Monticello School District and Sullivan County, illegal. And he is taking the matter to court.
Cohen believes the agreement, which was a compromise to avoid the colony receiving full religious tax exemption status for their property off of Route 42 outside the Village of Monticello, takes away the legal rights of the town assessor and the town planning board.
The town, under Supervisor Anthony Cellini, struck a deal in which the colony would be granted its tax exempt status while paying the town $20,000 a year, the school district $10,000 a year and the county $5,000 a year. Those numbers are greater than what they would have previously paid to the town. However, in exchange for the deal, the colony was able to build a sizable grocery store on its premises which may turn out to be exempt from sales taxes.
The deal bypassed the planning board, which was in the midst of reviewing the proposed grocery store, and was facing early resistance. The deal ordered the planning board to approve the grocery store.
“Totally illegal,” commented Cohen. “Totally improper.” Cohen, who has represented a number of planning boards as an attorney, said the boards are independent under state law. “They can’t order the planning board to do anything.”
In the short term, the deal has only exacerbated calls for a total reformation of state laws regarding tax exempt properties. But the deal is now also facing serious challenges from Cohen and the county.
But Cellini is defending his deal, stating that he did the best he could at a time when the school and county wanted nothing to do with the matter. They were content to let the property go exempt, and both bodies signed on to the compromise in court. The deal, which lasts for seven years, must be renegotiated in good faith after it expires, said Cellini. He said a statement clarifying the whole matter will be issued by Assessor Tom Frey this week.
The case goes back to 2004, when the bungalow colony formed a foundation and then filed for tax exempt status. Their application was denied by then town assessor Thomas Frey, who contended most of the property was a bungalow colony aside from the synagogue.
Cohen further comments that the New York State Real Property Tax Law allows for exemptions when a property is used exclusively for religious or educational purposes. In fact, the largest building on the property, which appears to be a synagogue, is actually called a learning center by the Satmar sect which operates the colony. But, said Cohen, they did not form an educational corporation.
In 2004, Ichud Bungalow challenged the assessment of the property in County Supreme Court. However, members failed to file an application for tax exempt status in 2005. By the end of the year, they reached an agreement with the town which was signed in early 2006.
Among the ways the agreement is illegal according to Cohen is that it stopped the town assessor from assessing the property over the life of the contract (seven years). Therefore, the new grocery store and any other additions could not be assessed. In addition, Ichud Bungalow will not need to file for tax exempt status every year, as is the law.
Furthermore, Cohen alleged the colony owes $50,000 in combined back taxes levied in 2005. Those taxes cannot be spared as part of the agreement because Ichud only challenged its 2004 assessment. In essence, the court was acting beyond its jurisdiction, he said.
In an effort to resolve the issues, Cohen appeared in court along with County Attorney Sam Yasgur and has been working with Ichud on a new agreement. Cohen is seeking to return power back to the town assessor and planning board.
“This case points out the glaring need to have the state law amended,” stated Cohen. He charged state courts with rewriting the laws by broadening the definition of tax exempt status to include ancillary uses.
“The courts have created this mess,” he added. He called on the state legislature to clean up the language in its laws to narrow the uses for exemptions. And Cohen noted it is not just religious groups who abuse that right, but so do other not for profit groups such as the Boy Scouts.
Cellini did agree with Cohen on that point, and members of the town board have also been pushing the message that “the laws of the State of New York must be changed.”
According to New York State Senator John Bonacic, a bill he helped sponsor in the senate to reform the tax laws passed the senate but failed in the Assembly.
County Debates Taxes
By Nathan Mayberg
MONTICELLO Aside from approving its annual budget last month, the Sullivan County Legislature was full of action in December.
A resolution calling on the state to increase the hotel room occupancy tax was passed narrowly with one dissension in legislator Ron Hiatt. The measure had been tabled previously after legislator Jodi Goodman had expressed concern after receiving calls from hotel owners. Legislator Jonathan Rouis said the bill would be more appropriate if passed in 2007, when the new state legislature takes office.
But at a special meeting December 14, the county legislators approved the increase in the hotel tax to 7 percent from its current rate of 2 percent. The move comes at an odd time, when the area’s resorts are only down to two, with one of them (Villa Roma) closed since a fire this past spring. The other, Kutsher’s, is expected to be closed for two months of the winter. A third resort, the Raleigh, was sold to a religious camp this past year.
Hiatt specified his concern the impact the resolution would have on Kutsher’s, which employs approximately 350 people. “This is a difficult economic climate for them,” he stated.
But legislators Goodman and Kathy LaBuda said the county’s new tax rate would only bring it up to par with other hotels throughout the state.
The move is intended in part to help fund the Sullivan County Visitor’s Association, whose past budget of $800,000 had been funded by the county previously.
In addition, the county is counting on the new tax increase to increase revenue by $425,000, as they counted on a a similar tax increase in last year’s budget which fell through.
In other December business at the legislature, former County Auditor Brian McCabe was switched over to the Sheriff’s Department and replaced by Deputy County Auditor Angela Chevalier at a salary of $68,500.
Former Sullivan County Assistant Attorney Cheryl McCausland will be returning to the county on a part-time basis as Senior Assistant County Attorney. McCausland took about a year off to spend time with her children.
A number of spending resolutions were approved including:
• $1,087,982 with the Sullivan Association for Retarded Citizens for operation of a sheltered workshop program.
• $1,025,533 to contract with Rehabilitation Support Services through the Department of Community Services to provide support to adults and children with mental illness.
• $256,183 contract with Friends and Advocates for Mental Health through the Department of Community Services to provide support services for individuals with mental illness and their families.
• $111,401 with Action Toward Independence through Community Services for peer support, MICA peer support, family support program and interpreter services.
• $100,000 agreement with Malcolm Pirnie for engineering services on Phase 2 of the landfill.
• $47,055 with Sullivan County BOCES for an unidentified school based prevention program.
• $36,000 with frequent county consultant Stephen Lynch for financial and economic analysis of proposed jail.
$30,000 with RLS & Associates for providing technical assistance during the transition of the transportation department.
• $80,500 contract with Knack, Pavloff & Company, LLP for the annual audit of the county.
• $35,000 agreement with the accounting firm of Bennett, Kielson, Storch and Desantis for an audit of the Adult Care Center.
• $17,500 for Bennett, Kielson, Storch and Desantis for audit of room tax records.
• $24,788 contract with SmartLinx Solutions, LLC for a surveillance system at the Government Center.
• $45,000 to contract with New York Association of Training and Employment.
• $26,698 with Sullivan County BOCES through the Department of Community Services for the Parents for Parents Program.
• $20,000 to contract with the Allen Tunnel Corporation for tax collection software.
• $13,903 to the United Way to manage client funding for children who are seriously and emotionally disturbed
• Agreement with Vivian Liff for speech therapy services at the Home Health Agency and Long Term Health Care program at $75 per visit.
• $45 per visit at the same institution with Andrea Henry for respiratory therapy services.