ELIZABETHTOWN — State Appellate court dismissed a legal challenge that put tax payments for state land in jeopardy.

The decision issued Friday in Dillenburg v. New York State reversed an earlier judgment ordering the state to stop paying property taxes until they were made fair and equitable.

John C. Dillenburg III, former supervisor of Arkwright in Chautauqua County, initiated the case several years ago and won lower court proceedings last November.

The ruling Friday came from the Appellate Division, Fourth Department in Rochester after a hearing held in September.

“The judgment so appealed from is unanimously reversed on the law without costs, plaintiff’s motion is denied, the declaration and permanent injunction are vacated, defendants’ motion is granted and the amended complaint is dismissed,” justices wrote.

In ruling against Dillenburg, the appellate court said the state Legislature is not subject to the “equal protection” challenge when sovereign immunity is waived for taxation purposes.

Sen. Betty Little (R-Queensbury) said the decision resolves an issue of concern to many in the North Country.

If upheld, the earlier court decision would have meant an end to nearly $70 million in state tax payments to the Adirondack Park.

Environmental groups filed a joint friend-of-the-court brief heard in the case.

Shortly after the hearing in September, Adirondack Council spokesman John Sheehan said the state Assistant Attorney General Robert M. Goldfarb referred to the Adirondacks specifically in his arguments.

“There was no real signal of the panel’s decision, except they seemed to get testy with Arkwright’s lawyer for over-explaining,” Sheehan said of the hearing.

“It was encouraging that the Appellate Division appears to have assigned a panel of experienced, senior judges to the case.”

Along with the Adirondack Council, the Adirondack Mountain Club, Open Space Conservancy, Adirondack Landowners Association, Residents’ Committee to Protect the Adirondacks, Association for the Protection of the Adirondacks, Catskill Center for Conservation and Development and Audubon New York formed a coalition represented by attorney Marc S. Gerstman, of Albany, former chief counsel for the state Department of Environmental Conservation.

They issued a near collective sigh of relief on Monday.

“We think this is a victory for every Adirondack town,” Sheehan said in a phone interview. “We are glad the courts recognize the state has an obligation to assist Adirondack taxpayers. And we are thrilled to have been part of the legal team that reaffirmed this. We think this will help preserve both the Forest Preserve and the 104 municipalities in the park.”