Tioga County IDA decision puts school district in a bind

By Matt Freeze —

Following a recent decision by the Tioga County Industrial Development Agency, the Owego-Apalachin Central School District will likely face challenges in passing its 2026–27 budget.

The decision not to extend a Payment in Lieu of Taxes (PILOT) agreement for Central New York Oil and Gas (CNYOG) means the proposed school tax increase could appear to be around 20%. In reality, district officials say the increase will likely reflect a more conventional rate.

The PILOT was originally scheduled to expire in 2019, at which point the CNYOG property would be added to the tax rolls with an approximate valuation of $80 million. The district had asked the IDA to extend the agreement to avoid voter confusion during the budgeting process.

That confusion is now anticipated as part of the upcoming budget cycle.

PILOT agreements are designed to stabilize tax payments for companies during large construction projects. These agreements establish an initial payment distributed among the county, municipality, and school district, then increase annually—typically by 2%—through the end of the term. Once completed, the payments are intended to match 100% of what would be owed if the property were fully taxable.

Superintendent Corey Green and Assistant Superintendent Bob Farrell attended the IDA’s meeting on Wednesday to discuss the outcome.

“We basically did not take up a resolution that was drafted to extend the PILOT further, which is based on discussions we’ve had over time,” said IDA Chair Jon Ward. “It’s an awkward position for the IDA, in that this PILOT agreement was initially intended to expire in 2019.”

Ward said the board had been willing to continue the agreement temporarily, but that time has passed.

“At this point, the whole idea behind the incentive package isn’t really there,” he said. “We were hopeful that Albany would fix the situation—it got all the way to the governor’s desk, but for whatever reason, that hasn’t happened. Our position now is that we’re in a difficult spot to extend a PILOT when there’s no further incentive for the recipient.”

Board member and Waverly Central School District Superintendent Eric Knolles said school districts across the state are increasingly facing similar issues.

“They have us between a rock and a hard place,” Knolles said. “To put the property on the tax rolls is really what’s supposed to happen once it’s up.”

Green said he understands the IDA’s perspective but is concerned about the possible consequences.

“If the budget vote doesn’t get 60% approval, the district would be forced to lay off 50 to 55 employees,” he said. “That’s going to have a direct impact on the community because we’re going to have to make up $3.1 million. I get the position you guys are in and totally understand that this has been going on for a long time, but at some point, the rubber is going to meet the road.”

Board member and Tioga County Legislator Tracy Monell said CNYOG has changed ownership since the original agreement was signed, and communication with the company has been difficult.

“They don’t even know what’s going on with this whole thing, and having a conversation with them is almost impossible,” Monell said. “They don’t seem to have a clue about what we’re even talking about. So that didn’t help the matter at all — but it did help us make our decision that we’ve chased this long enough.”

“We’ve got to wash our hands of it—sorry about that—I’m in the school district. I understand your situation, but it’s one year. Suck it up,” Monell added.

Knolles said he faced a similar situation earlier this year when the Chemung County IDA closed a PILOT with CVS. The change made it appear as though the district’s tax increase was over 10%, when the actual increase was 3.9%.

“It’s kind of like smoke and mirrors, right?” said board member Kevin Gillette. “You have to present it one way, but in the end, it doesn’t really matter a whole lot because the money is still coming into the district. New York State has failed to act — due to no fault of its own — you have to do a little smoke and mirrors, but it doesn’t change your outcome.”

Green said the district is caught between what’s true and what’s perceived.

“We just don’t know if it’ll be effective or not,” he said.

Gillette noted that if the IDA had continued the PILOT, the issue would persist until state lawmakers intervened.

“We keep taking the pressure off one of the few tools that really make things happen in this world — folks complaining to the folks in Albany that something needs to change,” Gillette said. “We’re taking our biggest lobbying arm, which is all these school districts. It just seems to me like we’re not just kicking a can down the road on one issue — we’re kicking it down the road for all the school districts in the state.”

Green expressed frustration that a legislative solution had twice reached Gov. Kathy Hochul’s desk, only to be vetoed.

“I can’t understand what the huge political gain is here by vetoing something off these lines that they created 25 years ago,” he said.

Knolles added that county IDAs are becoming more cautious about issuing new PILOT agreements.

“We’ve been much more prescriptive with allowing PILOTs, just because of that reason,” he said. “When you throw on some of these huge numbers, and it comes off in one year, it causes a tremendous edge because you’ve got to get that 60%.”

Knolles said there will be benefits moving forward as the expanded tax base helps distribute the levy more broadly.

“It does share that levy with more people when it goes on the tax rolls,” he said. “It takes some of the burden off the local taxpayers who’ve been shouldering the load for 15 years while the PILOT was in place. There’s supposed to be a benefit profile for the taxpayers.”