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Lowville, Lewis County begin tax-exemption battle

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LOWVILLE — Oral arguments were conducted Wednesday in the village’s lawsuit against Lewis County over a disputed tax exemption on the village’s town of Watson water treatment facility.

In question is a 1998 agreement between the parties that exempted the village from paying taxes on watershed property outside the village.

Last August, county legislators voted to gradually remove tax exemptions on village utility properties, prompting the suit.

Village attorney Mark G. Gebo and county attorney Richard J. Graham appeared in front of state Supreme Court Judge Hugh A. Gilbert.

Judge Gilbert, having received written arguments from both sides, said, “The court believes the basic facts are not in question.”

He then read the 1998 agreement.

Mr. Gebo said that because the village still owns the property and it has a public use — which is a condition of the agreement — the tax exemption is still valid.

The county, he said, “is not simply able to unilaterally dismiss it and say it doesn’t exist.”

Mr. Graham did not disagree with those conditions of the agreement. He said the village is relying on that part of the document.

However, he argued, “They have not addressed paragraph three.” That section states, “the contract is subject to legislative change by an amendment to real property tax law.”

Mr. Graham also said the county’s decision to tax the property “was not done in a vacuum.” The original draft was drawn up in February 2011 and passed as a resolution in August. The village, he said, did not bring the 1998 document to the county’s attention until December.

Mr. Gebo countered that the village did not need to request an exemption from the August resolution. “It doesn’t apply to them, because of a pre-existing contract,” he said. He then asked for the county “to be good on their word.”

“If there is a discretionary right to opt in, there’s a discretionary right to opt out,” Mr. Graham said of the 1998 document.

Judge Gilbert reserved decision in the case, pending further review. “Thanks for sending me back to the library,” he said to both attorneys.

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