Relates to the city of Gloversville and the town of Johnstown entering into certain cooperative agreements

- provide that, where a property owner has agreed to participate in a joint municipal economic development area, such property shall be taxed at the rate established by the agreement between the two municipalities;

- provide that the agreement shall specify the amount of the property tax rate, or the formula for determining the rate, that will apply to properties within the joint municipal economic development area;

- allow the property tax rate to be set at a percentage of the city or town rate, or to be set by such other method as agreed to by the municipalities; and

- provide that the agreement shall establish a process for entering into binding agreements between the City, Town and the participating property owner.

Existing law

Chapter 148 of 2001 authorized the City of Gloversville and the Town of Johnstown to enter into an agreement in which the City would provide water and other services to certain properties in the Town, and the two municipalities would agree to share the resulting property tax, sales tax and other revenues. The law specified certain items that must be included in the agreement, such as establishing a process for identifying affected properties, identifying the types of taxes to be shared, specifying the percentage of revenues each municipality shall receive, and specifying the process for collecting and sharing the revenues.

Justification

In 2001, legislation was enacted to enable the City of Gloversville and the Town of Johnstown to develop a tax sharing agreement in exchange for the provision of certain City services to properties in the Town.

In accordance with the law, local officials developed a proposal in which City water would be provided to certain commercial properties in the Town in exchange for a 50-50 split of any resulting sales tax and property tax. However, the agreement did not receive approval from the City Council. Concerns had been raised that the deal would make locations in the Town more attractive than locations within the City, while generating only minimal revenues to the City. Because the Town tax rate was significantly lower than the City tax rate, splitting the property tax revenue would result in minimal revenues to the City.

Beginning in 2007, local officials decided to revisit the issue, especially in light of the potential for future economic development opportunities along the City-Town border. In order to address previous concerns, local officials recognized that it was appropriate to establish a higher property tax rate in the Town for properties that would be receiving certain City services, such as public water. This would provide a more equitable arrangement for the two municipalities.

This bill would specifically authorize and empower the City and the Town to set a tax rate for affected properties that is in between the current City rate and the Town rate. The bill also clarifies and specifies that the municipal agreement shall establish the process for entering into binding agreements between the two municipalities and property owners who choose to participate in a Joint Municipal Economic Development Area.

This legislation seeks to foster municipal cooperation and economic growth in these two communities. By working together, both municipalities will be in a position to benefit from future growth.

Legislative history

S.7643/A.11469-A of 2008 (passed Senate/Assembly Cities Committee) S.8123 of 2008 (passed Senate)

Fiscal implications

None to the State. It is expected that, by working together, both the City of Gloversville and the Town of Johnstown will benefit from future growth and development.

Effective date

Immediately.