(The times Herald-Record posted the following article by Judy Rife on its website on June 12.)
ALBANY, N.Y. — A bill is being introduced in the state Legislature to recover the $1.7 million in property taxes that school districts and towns will lose because of Metro-North Railroad’s takeover of the Port Jervis line.
Sen. William Larkin, R-Cornwall-on-Hudson, said he is optimistic that the bill will be approved before the Legislature adjourns in another 10 days.
“All we’re looking to do is amend a law that we approved last year, so I don’t anticipate any problems,” said Larkin. “There’s no new money involved.”
Larkin’s bill is being co-sponsored by John Bonacic, R-Mount Hope, and Thomas Morahan, R-New City, the two other senators whose districts cover the 65-mile rail line that runs from Port Jervis to Suffern. The men are confident their counterparts in the Assembly will support it as well.
The three senators began casting around for a solution to the problem last month after the Times-Herald Record brought it to their attention and suggested amending the Rail Infrastructure Investment Act of 2002.
The newspaper has written several articles this year about the mixed blessing that Metro-North’s 49-year lease of the Port Jervis line from Norfolk-Southern Corp. represents. The Metropolitan Transportation Authority’s agencies are exempt from taxes on property they own or lease.
On one hand, Metro-North will upgrade the aging line, improving commuter rail service and encouraging more people to use mass transit.
On the other, it will force dozens of municipalities and school districts to raise taxes to recoup the lost revenue in effect, charging all their property owners for better train service whether they use it or not.
The senators canvassed towns, villages and school districts to determine exactly how much money was at stake $1.7 million a year. The Town of Woodbury, for example, will lose $46,182 and the Washingtonville School District, $166,664.
They researched state law and case law for direction on drafting legislation. And they met with Peter Cannito, president of Metro-North, and his staff.
Larkin said the trio ultimately decided that legislation would be necessary. One possibility was a law that would require the MTA and Metro-North to pay some or all of the property taxes on the Port Jervis line.
“But we figured if we passed a law saying the MTA has to pick up the cost, the MTA would get the governor to veto the bill because of the MTA’s own financial problems,” Larkin said.
So, Larkin’s bill calls for amending the law passed last year to revise how New York assesses railroad property. The legislation settled a string of federal lawsuits that Norfolk-Southern and CSX Corp. had pursued for years to bring their New York property taxes in alignment with their taxes in other states.
Because railroad property values will now decline significantly by roughly 45 percent lawmakers allocated $70 million in transition aid to municipalities and school districts to compensate for the lost revenue. The losses now will be phased in over 10 years rather than hit all at once.
The senators found that the $70 million calculation had indeed been made before Metro-North’s lease took effect and included all the municipalities and school districts along the Port Jervis line.
If the amendment wins approval, money earmarked for these communities will still pass to them and partially offset the impact of the removal of the Port Jervis line from the tax rolls.