Opinion: The need for a transparent assessment system
The next shoe to drop in the saga of property assessment in Nassau will be the county, town and city tax bills arriving in mailboxes this week.
Many taxpayers saw huge increases in October school tax bills for the past two years. In the fall, County Executive Edward Mangano blamed the school districts for the higher taxes. What will his answer be when homeowners ask why their 2014 county taxes went up? Although the county budget didn't increase, county property tax bills could go up an average of 8 percent.
The increases are again the result of Nassau's ill-advised plan to reduce assessments for almost all who challenged them, as well as freezing assessments for four years. This caused the tax base to decline for the first time in recent memory, and will cause it to continue to do so unless changes are made. The continued loss of taxable value ensures that property tax rates will continue to increase.
Nassau pays out more than $70 million a year in refunds to owners of commercial properties. For about 30 years, tax certiorari lawyers have challenged the value of almost every commercial property in Nassau, resulting in questionable settlements approved by state judges. Successful commercial grievances result in higher property taxes for homeowners (and profits for tax lawyers), since the share of property taxes paid by homeowners increases as the share paid by commercial properties decreases. Going forward the Assessment Review Commission should adopt a rule that assessment reductions will no longer be granted if their analysis determines the reduction is below 5 percent.
The culprit is a set of laws passed many years ago, unique to Nassau County, creating four classes of property (homes, condos, utilities and commercial properties). Many of the laws should be repealed. The county also must stop freezing assessments, and value property at market value instead of using an arcane formula.
The procedures used in the past two years to review assessment challenges have been compromised by the undue influence of the tax-reduction companies. The ARC, which is responsible for lowering assessments, was co-opted by the county administration's agreement to lower assessments requested by tax companies. In essence, the county executive takes credit for lowering thousands of homeowners' assessments, the tax firms make millions, and homeowners who did not grieve pay higher taxes. District Attorney Kathleen Rice should consider convening a civil grand jury to investigate assessment reductions.
It's also time for the county to find a well-qualified assessor, free of influence by the county administration, and produce a fair tax roll. The new assessor must ensure that tax firms are playing by the rules.
Yes, assessment errors happen and must be corrected. Valuing a home or business is not a science; it is only an estimate of the market value. Three licensed assessors valuing a home would likely come in with three different values -- but all within 10 percent of one another. But for years the tax firms have convinced courts that they can establish the actual value.
When I was in office, I recognized that there was no way to make the county school tax fair, and I supported abolishing the residential portion of the school property tax and replacing it with a modest income tax. I took hell for that suggestion. Many ask why New York City's property taxes are low; it's because there is a city income tax. Assessment issues are the third rail for Nassau officials. Mangano should remove his office from the process, and leave assessing to the professionals. That's how to end Nassau homeowners' continuing tax-bill surprises.
Democrat Harvey B. Levinson, a longtime chief deputy to former District Attorney Denis Dillon, was Nassau County's last elected assessor. He served from 2004 to 2008, before the position was made appointive.