Town hears much support - and some dismay - at proposed transfer tax

Warwick — Some see it as a way to preserve open space; Others say it is vital to preserving Warwick’s watershed areas. Still others say it is too little, too late, and unfair. But they all had their say last week as the Town Board heard comments on both the Community Preservation project plan and imposing a three quarters of a percent transfer tax on real estate sales in order to fund the town’s Purchase of Development Rights program. Those who spoke in favor of the proposed tax outnumbered those who are not in favor of it. “I‘m for this for two reasons,” said resident Todd Vogel. “One - we have to do whatever we can to preserve Warwick. Two - if we look at it closely, the long-term cost is nonexistent. For every 25 houses not built, that is one school bus, one classroom, one teacher we don’t have to add.” The more land we can preserve, he continued, the more the newcomers will want to come. That has been the case made by those in favor of this proposal, which will tax anyone buying a house or property in Warwick three quarters of one percent. The money would go into a fund to purchase the development rights of properties designated in the project plan. Properties listed include open space, trails, aquifer recharge areas, recreation areas, historic sites, and agricultural sites. Impact debated Most in the real estate business have come out strongly against this tax, which they claim will deeply affect their business and turn buyers away. Resident Bob McGrath, a supporter of the tax, said the National Association of Realtors reports there are transfer fees in 37 states yet they have not identified any town where it has had a negative affect. “All are potential impacts, none are actual,” McGrath said. But Alan Lipman, a Warwick resident and real estate attorney, disagreed. Although he said he has no problem with the preservation plan, he does not think the tax is fair. “My issue is with the tax,” said Lipman. “No one in this room will pay this tax. Who is it who will represent those who are to come? Some have special interests — lawyers, brokers. I have a special interest. I represent many developers. But I speak for me only. I see this tax as grossly unfair and not able to accomplish what you are working to accomplish.” Lipman said he did the calculations. He said that if the number of transactions and the price of development rights stays the same, it would take 123 years to acquire the land included in the plan. “It has become fashionable of late to say let the other guy pay for it. I’m not fashionable,” Lipman said. “When you came to Warwick, nobody stuck their hand out and said hey, you’re affecting my lifestyle.” Instead, Lipman suggested that the board increase town taxes by a dollar or two per thousand. It would raise more money than this transfer tax and would be more equitable. “That is the fair way to do this,” he said. Fairness issue Supervisor Michael Sweeton helped devise the plan. He defended it, saying it is fair to ask newcomers to pay their share for what has been done. “The fairness issue has bothered me too,” he said. “I’ve helped build new schools, an all-weather track, renovated a high school and helped preserve seven working farms.” So far, Warwick has preserved or is in the process of preserving about 2,300 acres of land. The $9.5 million approved by voters in 2000 is either spent or committed. In addition to farm land, the town has also spent PDR funds to create ball fields and renovate the beach on Greenwood Lake. There also has been financing from the state and federal governments, the Orange County Open Space fund and two private organizations - Orange County Land Trust and Scenic Hudson. The three-quarter of a percent transfer tax would work this way: A home sold for $250,000 would brings in $1,125. For someone buying a $400,000 home, the tax would be $2,250. A home costing $700,000 would generate $4,500 for the fund. The first $100,000 of the purchase price would not be subject to the tax; the first $50,000 of a land transaction would be exempt as well. Approving this transfer tax would bring in approximately $700,000 to $750,000 each year until the legislation expires in 2025. This is a conservative estimate, Sweeton said, based on the past three years of real estate sales. More important than the dollar amount each year, he added, “this gives the town borrowing power. If we find a critical property in danger of development, we can borrow against this income.” Dr. Richard Hull focused on Warwick’s water. “Without the PDR program, how do we protect our water resources?” he said. “Our farms and forests protect our watersheds. We worry about financial burdens on homebuyers with this tax. It is crystal clear to me — if we don’t implement a funding source for PDR, we may be in the predicament as many of our neighbors.” The Town Board did approve the project plan, which lists all properties that are eligible for Purchase of Development Rights. It is not mandatory; it is a voluntary program. The board will meet again on Aug. 31 to vote on whether to approve the local law that would impose the tax on real estate transactions, pending voter approval in November.