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A $173 Tax Bill Is Behind A Big Court Case On Mass. Forests

HAWLEY, Mass. — Efforts to conserve Massachusetts’ forests are paying off. Today, 60 percent of the state is covered with forests. That’s more than any time in the last 200 years.

But there’s a price to pay for protecting our woodlands. And the question is: Who pays?

Large conservation organizations argue that the forests they own and maintain should be tax exempt. But small towns that are heavily forested say they need the revenue.

Now the state Supreme Judicial Court is wrestling with the thorny issue.

Heavily Forested Hawley

In the northwest corner of the state, 110 miles from Boston, is the town of Hawley. Its population: 337.

Henry Eggert, chairman of Hawley’s Board of Assessors, wants the New England Forestry Foundation to pay more for its land. (Bruce Gellerman/WBUR)

Henry Eggert, of Hawley’s Board of Assessors, wants the New England Forestry Foundation to pay more for its land. (Bruce Gellerman/WBUR)

Henry Eggert is the head of Hawley’s Board of Assessors. His office — in fact, the town’s entire government — is located in what had been a one-room schoolhouse. In its pre-Colonial heyday, Hawley was bigger than the city of Springfield. But its fortunes diminished as its population declined.

“There is no commerce here,” Eggert said of Hawley. “We don’t even have a post office.”

But Hawley does have a lot of trees. Most of the town — 30 square miles — is covered with trees.

If all the land were privately owned, it would generate hundreds of thousands of dollars a year in property tax revenue. But half the land is state forest, and Massachusetts pays Hawley just $35,000 a year for it.

Which means the town, with its million-dollar-a-year budget, needs to make every other acre of taxable land count.

$173 — Too Little, Or Too Much?

Eggert says some of that money should come from land owned by the New England Forestry Foundation, a nonprofit conservation group. NEFF bought the land in Hawley 14 years ago. In the spring it’s perfect for hiking; in the winter, for snowmobiling and cross-country skiing.

A sign at the edge of NEFF’s land is a sore point for Eggert. Because it marks conservation land, it means NEFF gets a 90 percent break on its property taxes, compared to what a private landowner would pay.

“So for this 120 acres of woodland,” he said on a tour, “the nonprofit pays just $173 a year.”

Eggert says he’s looked for evidence the nonprofit deserves the tax cut. He doesn’t see it.

“They’re not saying on that sign that they’re educational programs, just opportunities,” he said. “They have not provided educational programs up here.”

And without those programs, Eggert says, NEFF — nonprofit or not — needs to pay its share of property taxes.

But Bob Perschel, NEFF’s executive director, sees the forest and the trees a lot differently.

“We want to ensure that that piece of property stays forest forever,” he said.

Perschel’s organization manages more than 1 million acres of forest in the region, most of it in Maine. And besides the small parcel in Hawley, the group has forests in more than 50 Massachusetts towns.

“We love this region,” Perschel said. “We want to make sure it continues to be and look like it did when we were children and when our parents were children, and that won’t happen because we’ve got population growing and a lot of development, unless we protect land.”

Perschel says NEFF is doing forest conservation work that the state would otherwise have to pay for. So about five years ago he decided NEFF should be tax exempt. Even $173 a year in Hawley property taxes is too much.

“Every dollar that has to go into paying taxes on the lands that we own is a dollar less we have to buy the special property in your town that could be developed and people would like us to protect it, but we can only do as many of those as we have the funding to do,” he said.

Hawley’s tax assessors fought back, and the small town turned out to be a formidable foe; it took NEFF to the state tax board, the trial court where matters like this are settled.

To save money, Hawley’s part-time assistant administrator, Virginia Gabert, represented the town before the tax board — even though she has no legal training.

“The idea of being pushed into backing down because we’re a small town and we can’t afford to defend ourselves is pathetic,” Gabert said. “They sent us an exemption letter. We denied it. We went to the Appellate Tax Board and won.”

And NEFF appealed that decision to Massachusetts’ Supreme Judicial Court. Oral arguments were heard in January.

A High-Stakes Court Case

It’s not exactly high courtroom drama, but the stakes are high: It’s a test case that could turn Massachusetts property tax laws upside down.  TWEET Here’s how:

– If Hawley loses, the financial fate of small forested towns across the state could be in jeopardy.

– If NEFF loses, Perschel says that could threaten some of the largest and oldest conservation organizations in Massachusetts.

“What’s really important to us about this case is that we get to continue our historic mission that we’ve been on for 70 years,” he said.

Backing NEFF’s court case are The Nature Conservancy, the Mass Audubon Society and The Trustees of Reservations. They stand to save millions if the court’s decision goes their way.

The case could turn on a definition: In terms of forest conservation, what is a charity?

Perschel acknowledges his organization has made $25,000 selling wood from its Hawley forest, but argues it’s forest management for the public good that keeps the land productive.

“Productive in the sense that there’s sufficient wildlife habitat, that the water runs clear in the forest, that there’s enough trees to absorb carbon and produce oxygen,” he said. “These are all benefits the people of Massachusetts get without paying for. We want to make sure that those benefits continue to flow.”

But Hawley’s Eggert has issues with that argument. He says charity begins in Hawley.

“If they want to be a charitable organization and be tax exempt they’ve got to be charitable,” he said. “So they’ve got to be donating something other than clean air and clean water to the town of Hawley. I provide clean air and clean water to the town, but I’m not tax exempt.”

The Supreme Judicial Court will decide the matter by the end of this month.

And other states are watching. There’s not a lot of case law when it comes to conservation and tax exemptions.

So, what started as a dispute over a $173 tax bill in Hawley could have implications far beyond the borders of this small New England town.

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