If the Tuckahoe School District hadn’t lost $6 million over two years in taxes paid by the four golf courses within its boundaries, it wouldn’t be forced to seek a merger with the Southampton School District, Tuckahoe officials maintain.
Now the district could be headed to court, seeking to recoup some of that money, and receive higher tax payments in the future, to benefit either the Tuckahoe district or a merged school district down the road.
Last week, district officials announced that they have hired a private attorney to explore whether they can fight recent court decisions that changed the way golf courses pay taxes two years ago. After the ruling, the golf courses’ tax bills are based on income rather than on the value of the land they occupy. Residential land is assessed based on property value, and the golf courses are located in residential zones, but the courts say they should instead be assessed the way commercial properties are assessed—based on annual income.
The golf courses—Sebonack Golf Club, National Golf Links of America, the Southampton Golf Club and the Shinnecock Hills Golf Club—cover a collective 951 acres, or about 12.7 percent of all the land within the district’s boundaries, but pay less than 5 percent of the district’s total tax levy. In general, they pay about one-third the taxes they would pay if assessed on property value.
Attorney Stanley E. Orzechowski says the district can claim financial and educational damages due to the circumstances. Superintendent Chris Dyer said Tuckahoe is considering all options and also will seek advice from local legislators on a logical next step.
“We are still gathering information and attempting to act fiscally responsible for our taxpayers in Tuckahoe and for the future school district for tax revenues,” Mr. Dyer said. “Our pursuit of revenues was for the benefit of our current and future school district, regardless if this was the Tuckahoe Common School District or a merged district.”
According to district officials, another issue is that when golf courses are assessed as commercial properties, as private businesses they are not obliged to provide the town assessor’s office with revenue reports—the town can only estimate annual income and base the tax bill on that guess.
Last week, district officials estimated that, to date, the Tuckahoe district has lost $6 million in revenue from the golf courses over the past two years, the period of time since a court decision changed the method of assessment. That revenue, district officials say, would be enough to sustain the district for several years.
The current system stems from a State Supreme Court decision in a lawsuit in Nassau County, which concluded that golf courses should be assessed on the income method, rather than on their highest and best economic use—namely, a residential use of the land.
Lisa Goree, the Southampton Town tax assessor, confirmed that golf courses, like all commercial businesses, are assessed based on their commercial activities—restaurant and pro shop sales, for example—but not on membership dues, which she said would already be reflected in restaurant and pro shop sales. She added that although the golf courses take up a lot of the property in Tuckahoe, past court cases have determined that they should be assessed as commercial businesses.
“They just have to provide the data that is associated with the day-to-day business operations of the course,” Ms. Goree said. “They do pay taxes, they do pay school taxes, but being that they are valued on an income basis, everyone would think that because they have a huge private golf course they would pay more. But because there is a state law that requires the assessors to look at only certain information submitted by the golf courses, they don’t.”
At a Tuckahoe Board of Education meeting last week, School Board President Bob Grisnik said the district is committed to looking into taking legal action, noting that the tax revenue could be an asset to the district in the event of a proposed merger with the Southampton School District.
“Whether it is for this district or the new combined school district, that assessment is going to carry us forward,” he said. “We have been FOILing some information from the town to determine how income valuations were determined in the courts, and we are pursuing that now.”
Part of the research now, Mr. Grisnik said, is to determine whether it would be better for the school district to pursue a lawsuit or for a group of private residents to take action.
According to Mr. Dyer, the district is still collecting information from Southampton Town about the golf courses. He added that the district will not take action without consulting local politicians, mainly Southampton Town Supervisor Anna Throne-Holst, State Senator Kenneth P. LaValle and State Assemblyman Fred W. Thiele Jr.
“We are continuing to talk with our local representatives and exploring decision paths that were made in the past,” Mr. Dyer said. “We continue to gather information from the town and golf courses. The reductions of revenues from the new assessments have caused fiscal challenge for Tuckahoe Common School District, the fiscal challenge aspects leading to the merger study.”