It doesn’t get any more David v. Goliath than this:
Monday, in State Supreme Court, Sullivan County Judge James Farrell ruled that the state law that taxes wind and solar at one-third the rate of anything else is unconstitutional—and tossed it.
While the state can appeal the hard-fought decision—and surely will—Energy Committee chair Don Airey was taking time to celebrate.
“We won,” he said.
“We won—and we should be proud. I always knew we had a case. Schoharie County did something pretty incredible.”
Real Property Tax Law 575-b was enacted by the state in 2021 and requires that assessments on solar and wind projects one megawatt or larger be heavily “discounted.”
In the Town of Sharon, which Judge Farrell called out in his decision, that discount amounts to a loss of $3.3 million in property taxes—a year—from the 50-MW NextEra Energy project.
In April 2022, supervisors filed their first lawsuit against RPTL 575-b, requesting and losing requests for temporary restraining orders as the state rewrote tax law around the challenge, before the Article 78 and “home rule” lawsuit came before Judge Farrell last October; he agreed the county had “standing” in the case—the right to challenge the law.
Without 575-b, solar and wind projects without PILOTs—payments in lieu of taxes—will be taxed at 100 percent—effective immediately.
The state has 30 days to appeal.
“I’m very proud of Schoharie County,” Supervisors’ chair Bill Federice said after getting the news.
“I’m very proud of Schoharie County and our 16 towns for filing the suit against the state.
“Actually, I’m thrilled to death.”
While Schoharie County efforts to repeal 575-b had drawn interest from other counties, none joined in the fight, none contributed a dime to the legal costs, Mr. Federice pointed out.
The implications of Judge Farrell’s decision, however, will be felt statewide.
It could also open the door to seeking damages for lost revenue and even the state’s siting of solar and wind facilities.
In his decision, Judge Farrell found the state “abdicated its constitutional responsibility and has delegated its taxing power to an administrative agency”—the Department of Tax and Finance—the crux of Whiteman Osterman and Hanna attorney Dylan Harris’s argument.
“Accordingly, the Court finds that RTTL 575-b is unconstitutional.”
Mr. Airey said Tuesday he expects the fight to continue, but for now, he’s taking the win.
“It was a long, hard process, but these projects are ridiculously underassessed,” he said. “The judge saw it for what it was.”