If a tree grows in the forest and nobody cuts it, should it be taxed?
Apparently yes, according to state officials who are advising local tax assessors on how to tap all those oaks, maples and pines that landowners have on their property for cash.
The trouble is, this newfound revenue source could sprout unforeseen problems.
Some fear taxing trees could cause wholesale clear-cutting.
And farmers worry it could lead to taxes on standing crops such as corn, hay or fruit trees.
If nothing else, it's an example of how New York's endless appetite for tax revenue can take root in novel ways.
"We're starting to get phone calls from around the state," said Kevin King, president of the Empire State Forest Products Association, a trade group of timberland owners of varying sizes. He said town assessors in western and northern New York have started to put a taxable value on timber, and the state Office of Real Property Tax Services has been advising local officials how to do that.
In theory, King said, a town could tax a small patch of trees in someone's backyard, although that probably wouldn't be worth the time and effort.
Tupper Lake in the Adirondacks, rural Montgomery County, and the Catskill community of Shandaken, in Ulster County, have all started assessing trees, said King. In the Cattaraugus County town of Allegany, King said, the change will double land taxes, with one landowner seeing his taxes go up fivefold.
"You talk to people and their jaw drops," said Jason Crisafulli, chief administrative officer at Kinley Corp., a family-owned firm that owns 3,000 acres of timberland in Allegany. Assessing the trees means their tax bill is set to rise from $15,000 to $57,000.
They plan to fight the assessment.
Crisafulli and King, as well as Capital Region politicians, place part of the blame on the Office of Real Property Tax Services for advising local assessors on how to tax timber.
ORPS spokesman Joe Hesch said state law has long allowed trees to be assessed and his agency hasn't offered any new directives or memos about the issue.
"Trees have always been taxable. We've been using the same process for 40 years," said Hesch. "We have forest data available for assessors who ask for it, but that's nothing new."
Crisafulli said ORPS wants all of the state's communities to have up-to-date assessments that reflect the full market value of properties. That makes sense, he said. But as part of that, ORPS is saying that timber, which has skyrocketed in price due to the Iraq war, Hurricane Katrina and the booming Asian economy, should be factored into land values.
"This is going to be an up and coming topic," said Crisafulli.
It's already having some local impact.
The Rensselaer County Legislature last month passed a resolution urging the tree tax be axed. Kenneth Herrington, a Brunswick dairy farmer and Republican legislator, said farmers are worrying the state will try to apply the concept to standing crops such as corn or grain. "It's a new layer of taxes," he said.
Bills to stop the practice have also been introduced in the Assembly and Senate.
The method by which trees are assessed and taxed can be complex. Essentially, King said, the new approach involves separating trees and their value from the land they grow on. Different values can be assigned to various types of tree stands or woodlots.
So far, the new method of assessment has been seen in rural areas and has hit people with timber stands and large tracts of land the hardest.
Tree taxes can also be viewed as a politically acceptable way to raise revenue, King suspects. Increasing "broad based taxes," such as income or sales taxes, is politically unpopular, he noted, so government is constantly on the lookout for more targeted or subtle ways to get more money.
It's not the first time a relatively obscure tax hike has sprouted in localities across the state. Two years ago, counties began quietly raising their mortgage taxes, increasing transaction costs by hundreds of dollars. County officials said they needed the money to pay for Medicaid, the health insurance program for the poor.
There could be other forces at work as well, including rising timber prices, which have made trees more valuable. There may be a desire among state officials to have private landowners shoulder more of the cost in areas where the state owns a lot of wilderness land and pays local property taxes.
Taxing trees could have environmental effects, noted Assemblyman William Parment, D-Jamestown, who has introduced a bill to stop the assessments.
Parment is among those who say some landowners may simply clear-cut their woodlots to achieve long-term savings on taxes. King said he's already heard of such instances.
"They are forcing people to aggressively cut and subdivide," said Crisafulli.
Sen. Catherine Young, R-Jamestown, is also offering a bill to stop the tax.
Parment also said he didn't believe taxing timber makes much policy sense. "In taxing policy, trees don't demand much service," he said.Albany Times Union
