Appeals Court: Nassau must pay for property tax refunds

A state appeals court Wednesday rejected Nassau's attempt

A state appeals court Wednesday rejected Nassau's attempt to shift the cost of property tax refunds to school districts and towns in a decision that could cost the county $80 million a year. (Jan. 30, 2013) (Credit: Howard Schnapp)

A state appeals court Wednesday rejected Nassau's attempt to shift the cost of property tax refunds to school districts and towns in a decision that could cost the county $80 million a year.

A four-judge Appellate Division panel unanimously ruled that Nassau's repeal of the "county guaranty" violates the New York Constitution and the state municipal Home Rule law, which limit the county's power to enact laws involving taxation.

The panel noted the state legislature in 1948 adopted the guaranty, which made the county liable for all property tax refunds resulting from erroneous assessments. Unlike most of the state, where towns and cities issue assessments, Nassau sets the taxable values for all properties in the county. The county legislature adopted the guaranty in its administrative code.


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But in 2010, as Nassau searched for ways to solve its ongoing budget problems, the Republican majority in the county legislature changed the code at the request of County Executive Edward Mangano and eliminated the guaranty for tax bills that go out next year.

The county had been paying an average $100 million annually in tax refunds -- about $80 million on behalf of the schools and towns. With Democratic legislators refusing to approve borrowing to pay the refunds, the backlog of tax challenges is estimated to have grown to more than $300 million.

More than 40 Nassau school districts and officials, along with the Town of North Hempstead, 19 special districts and some taxpayers sued. Wednesday's Appellate Division decision overturns a lower-court ruling affirming the county repeal.

"It's a victory for school districts," said Herb Brown, Oceanside superintendent. "It would be inappropriate to ask schools to pay for [assessment] reductions when the county is the one that has a process in place to decide who gets a reduction and who doesn't."

Jack Bierwirth, superintendent of Herricks schools, said his district already lost 85 staffers to budget cuts. "Having to cut more in order to pay for this problem that the county seems unable to resolve really seems unfair," he said.

Baldwin superintendent James Mapes said he's delighted with the decision, though he fears the county might appeal. His district is in a tough financial spot, he said, and the burden would have been hard to account for.

"We were looking to budget a quarter of a million dollars for what we thought might be our expenses for next year had the original court decision held, not being at all sure if that was the appropriate amount," he said.

North Hempstead Supervisor Jon Kaiman said, "Certainly we appreciate the bind that the county is in when it comes to assessment, but it's the county's problem to resolve and not just to put it on the towns and schools."

North Hempstead's attorney Maureen T. Liccione, a partner at Jaspan Schlesinger law firm, said, "We are delighted with this victory. Our clients will no longer have to bear the burden of assessment errors which they do not commit."

County Attorney John Ciampoli promised to appeal, saying the decision "holds Nassau County's government to a different standard than any county in the state and nation."

The ruling comes in a year when all county officials are up for election, including Republican Mangano. His Democratic predecessor, Thomas Suozzi, who is running for his old job, said, "To claim you're not raising property taxes and just pushing higher taxes onto school district taxpayers is just outright deception."

Mangano spokesman Brian Nevin responded, "Tom Suozzi conveniently forgets he left behind $1.6 billion in debt and a broken assessment system that cost our taxpayers dearly."

Businessman Adam Haber, who also is seeking the Democratic nomination, said, "Political insiders have played shell games with county finances for too long -- shifting the burden around doesn't fix a spending and revenue deficit."

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