Schoharie County towns sue N.Y. over solar, wind farm property taxes

Assessors say state has usurped their authority regarding new green energy facilities

ALBANY —A coalition of more than a dozen Schoharie County towns is suing the state, contending the prescribed method for taxing solar and wind farms is unconstitutional as it usurps the authority of local assessors and shortchanges municipalities of needed property tax revenue.

And while state law dictates how solar and wind farms are assessed, local assessors are still required to defend the towns if the owner of a solar or wind farm contests their property tax bill, according to the suit.

The lawsuit is the latest chapter in what has been a yearslong, little-seen fight over how much revenue the new solar and wind farms being built across upstate New York should provide to the municipalities that host them.

In an effort to encourage more solar and wind energy, state laws have essentially limited the property taxes these facilities have to pay to municipalities, counties and schools. But localities believe they should get more benefit from the facilities, which typically create few jobs or bring other long-term benefits to local communities.

Much of the suit focuses on the role of local property tax assessors, who contend the state’s mandated method for valuing solar and wind farms usurps their authority.

“Assessors are to be the ultimate authority as to what the appropriate methodology for determining the assessed value of property in their jurisdiction is,” reads part of the complaint filed last week in state Supreme Court in Albany County by Dylan Harris, an attorney with Whiteman Osterman & Hanna.

“By forcing assessors across the state to apply not only a specific method, but a specific and proprietary formula which those assessors did not develop and are not privy to the internal mechanisms of, the Legislature is impermissibly infringing on the constitutional and statutory rights and obligations of assessors without authority to do so,” according to the complaint.

Schoharie County has emerged as a hot spot for developers of solar arrays, as the county has relatively affordable land and contains major power transmission lines that keeps costs down. It’s also a sparsely populated, rural county with few large suburban housing tracts where there might be more objections to large solar or wind arrays.

Nonetheless, some residents have objected to the solar developments, citing fears about rising land values, which can hurt local farmers and tax revenue.

A similar lawsuit was filed two years ago by Schoharie County municipalities. They argued that state bureaucrats had overstepped when they developed the new tax prescription without legislative authority. But that lawsuit was discontinued after passage of the 2023-24 state budget when lawmakers and the governor added their own language to the tax plan, meaning it was done legislatively rather than bureaucratically.

The current suit emphasizes what the plaintiffs say is the overriding of local assessor control. “I think we’ve met the burden,” Harris said, adding they are seeking a restraining order this week to halt the new tax system from taking effect this spring, which is when many assessment rolls are updated.

A spokesman for Gov. Kathy Hochul said they wouldn’t comment on pending litigation. State policymakers are using a variety of inducements to encourage more solar and wind energy in an effort to shift away from carbon-emitting power sources such as natural gas or oil-powered generators.

Power plants have historically been assessed by replacement value, that is what it would cost to build an existing facility today. Newer facilities are assessed by the amount of money they generate — but with a significant discount and one that ignores all the subsidies that solar and wind facilities get, said Harris.

The complaint notes that the town of Sharon had a solar array there appraised at $99 million. But the state’s system values the array at $22.6 million — a $76.4 million prospective loss in the town’s tax base.

The lawsuit applies to facilities that generate more than 1 megawatt of power.

The municipalities participating include Blenheim, Broome, Carlisle, Cobleskill, Conesville, Esperance, Fulton, Gilboa, Jefferson, Middleburgh, Richmondville, Seward, Sharon, Summit, Wright, and Schoharie.