In the misery that is the Nassau County financial mess, it's largely overlooked that County Executive Edward Mangano has made progress in dealing with a core economic challenge: property tax overassessments and the guarantee by the county to pay the refunds owed by school districts and local governments.
This year, for the first time in recent memory, the county settled all residential appeals before property owners actually paid their property taxes. That means there were no overpayments, and no refunds.
Nassau County has about $3.2 billion in debt. The majority of it was run up refunding property owners who prevailed in tax grievances. The county guarantee has meant that Nassau, uniquely, has refunded to the homeowner overpayments collected by the county but then dispersed to school districts, municipalities and special districts. These other entities have never had to return to the county or the property owner a penny of the overpayments they received.
So if you paid a total tax bill of $10,000, and it was later reduced to $8,000, the county sent you a check for $2,000. But having only gotten $1,700 as its share of your original payment -- and having dispersed the rest to your school district and village -- the county lost $300.
Fixing this for residential owners will save the county $20 million annually, officials say. Improvements to the computer system and an assessment freeze by the county will mean an even smoother process in the future.
Now, though, Mangano must find a way to address the bigger problem: commercial property tax appeals. They represent about 80 percent of the money refunded. The county says the key to getting on top of the problem is borrowing money to pay the refunds owed commercial owners (and their attorneys) for grievances in previous years. But Democratic county legislators are refusing to allow this until they get a better shake in the drawing of new legislative districts for the 2013 elections.
Mangano and his staff argue that attorneys don't have much motivation to settle this year's grievances when they still can't get their clients repaid for challenges won for tax bills going as far back as 2008, something the borrowing would do. The attorneys, who make their living in commercial assessment challenges, say they want the same streamlining of the process in their realm as the residential arena now has -- but they also argue that assessing commercial property is a lot trickier than residential.
Mangano's plan has been two-pronged: Fight the county guarantee in court, while making it irrelevant through administrative improvements. The county won at the State Supreme Court level and now faces an appeal led by public school districts.
If Mangano can do for commercial property owners what he did in the residential arena, he will have achieved something his predecessors couldn't -- and he'll have solved one of the county's biggest financial challenges. The progress he's already made shouldn't be overlooked in the panic of county budget deficits.