Bill seeks to end 'country club loophole' for tax assessments

ALBANY — A novel proposal aimed at further taxing posh private golf country clubs, especially ones that include the name Trump, seems to be a long shot in Albany.

The bill would allow local officials statewide to pass laws that would permit tax assessments for private golf courses to be based on “the property’s highest and best use." That means a local government could tax a private golf course based on the prospective value of the land if it were to be developed for condominiums or other commercial use, a system opponents of the bill say is unfair.

The “most egregious” case of country clubs avoiding a bigger tax bill is the Trump National Golf Course in Westchester, supporters of the bill said. The private club boasts a 75,000-square-foot clubhouse with five-star service and the largest pool in Westchester County on 140 acres 45 minutes from Manhattan. President Donald Trump valued the club at $50 million on his required financial disclosure record as president, but his attorney in seeking a lower property tax bill valued the property at $1.5 million.

The legislative proposal is forcing one of the first showdowns between the progressive leadership and the more moderate suburban wing on Long Island and in Westchester that sealed majority control of the Senate for Democrats in last year’s elections. At this point, the Long Island moderates opposed to the measure have the upper hand.

“I will be opposed to it,” said Sen. James Gaughran (D-Huntington), chairman of Local Government Committee where the bill now sits. “I have 17 of these courses in my district,” he said in an interview. “The practical impact of this is that most, if not all will eventually have to close down.” 

“I’m going to vote ‘no’ on the bill,” agreed Sen. John Brooks (D-Seaford), a member of the Local Government Committee. He said he had felt enough opposition within closed-door conferences that he doubted leaders could get the bill out of committee to force it to a Senate floor vote.

“I have not seen any indication of that and quite honestly, in conversations I have had, others would step up and say, ‘This is the wrong thing to do,’” Brooks said. “I guess anything is possible, but fundamentally you can’t make a case for it.”

With Republicans expected to remain solidly opposed to the measure, the bill could be bottled up until the end of the session on June 19. A committee chairman alone can bury legislation without a vote.

The bill's sponsors, Sen. David Carlucci (D-Clarkstown) and Assemb. Sandra Galef (D-Ossining), said the legislation addresses a "country club loophole."

Assessors have for decades found it difficult to assess golf courses because they are so different from traditional commercial taxpayers. That led golf courses, mostly on Long Island, to challenge their assessments and for courts to come up with a uniform way of assessing their value, Galef said. That system has since 2000 primarily used daily retail sales as a way to judge value for tax purposes. That works for most courses open, or partly open, to the public where separate fees are collected to play, use carts and to buy merchandise, meals, drinks and other offerings.

But most private golf clubs operate differently, charging annual membership fees of as much as $250,000 a year, which cover the cost of golf, meals, drinks, merchandise and other services and amenities. That means little cash may be handled daily, which could lead to these clubs being assessed at a low value for tax purposes.

“Right now, we’re subsidizing the leisure of, really, the wealthiest people in the county on the backs of school children and hardworking property taxpayers,” Carlucci said.

Galef said many top clubs had members from outside the local area including the Sleepy Hollow Country Club in Briarcliff Manor, which was once an estate for Vanderbilts and Rockefellers and now includes a 47-stable equestrian center. It is seeking a dramatic reduction in its tax assessment.

“The community is covering the cost for people outside the community play golf,” Galef said.

Opponents, however, argue that the bill, if made law, would force private courses out of business resulting in no tax revenue.

A third of the state’s 500 public and semipublic courses would close within five years if the bill is passed, estimated Charles Dorn of the New York State Club Association, which lobbies for golf clubs. He has told lawmakers that in Nassau County a club’s tax bill could go from $400,000 to $1.6 million, while a Suffolk County club’s bill could rise from $500,000 to $5 million.

“It’s the most ludicrous and ridiculous bill,” said Sen. George Amedore (R-Rotterdam), who is also on the Senate Local Government Committee. “It’s very politically motivated and it’s really unfortunate.”

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.