Showdown over Nassau property tax refunds

Attorneys representing Nassau businesses and homeowners owed $102 million in property tax refunds are going to court Thursday to try to force the cash-starved county to pay up.

The lawyers are asking Supreme Court Justice Thomas Adams to start the process of turning the court-ordered refunds into money judgments, which would allow them to place liens on Nassau's bank accounts to collect clients' money.

Adams has ordered Nassau's Presiding Officer Peter Schmitt (R-Massapequa) and Minority Leader Kevan Abrahams (D-Freeport), along with County Executive Edward Mangano's top financial deputy Tim Sullivan, to explain why the court should not order Nassau to immediately pay the tax refunds, which usually cover multiple years, with interest.

Attorney Laureen Harris, head of Nassau's tax challenge bar, is expected to be first up, arguing that the county's failure since September to pay a $112,000 refund owed to her client, the owner of a small Hicksville office building, has driven him into foreclosure.

The county's inaction "has resulted in real-life tragedies," Harris said. "In a recession, it's easy to topple a financially vulnerable property. It's gotten to the point now under these recessionary conditions, they just can't hold out this long." Three similar cases were filed by well-known commercial tax challenge lawyers; others wait in the wings.

"This is a symbolic guy, but there's hundreds behind him," Harris said.

The county for nearly two decades has borrowed to pay tax refunds, which average $100 million a year in Nassau. But a state control board had refused to let Mangano borrow to pay refunds until late October.

However, borrowing must be approved by the legislature. When County Attorney John Ciampoli asked lawmakers to approve $102 million in settlements and borrow to pay for it, Democrats refused to give the 10-member Republican majority the needed votes.

They complain that the county has yet to spend $14 million left from past refund borrowing. They also say Ciampoli did not provide information that identifies the property owners, lawyers or appraisals for half of the commercial cases. Without that, Legis. David Denenberg (D-Merrick) said, lawmakers do not know if they have a conflict or whether the settlement is justified. "He's trying to pressure the legislature to be fiscally irresponsible," Denenberg said.

Ciampoli said he has submitted all requested data, just not in the form they want. "What we have here is a continuing game of chicken in which Kevan Abrahams seeks to obtain some sort of political gain in return for doing what is necessary to operate and keep the fiscal integrity of the county intact," he said, referring to a December letter to Mangano in which Democrats said they could not consider any borrowing unless there is a fair redistricting process.

"If people put a levy on the county bank accounts for all of these settlements, it could create fiscal chaos," Ciampoli said. "If we do not get the bonding authority from the legislature, that's what's going to happen."

Democratic aide Dave Gugerty responded, "Ed Mangano's irresponsible decision to balance the budget using the county credit card is what's put the county on a path to fiscal chaos. The Democrats will not blindly approve the borrowing of hundreds of millions of dollars that our grandchildren will be paying off."

Harris said her client just wants to be paid. "A government's first obligation is to meet its financial obligations," she said.