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Court expected to order Nassau tax refunds

Nassau County Commissioner of Investigations and County Attorney

Nassau County Commissioner of Investigations and County Attorney John Ciampoli. (April 26, 2012) Credit: Howard Schnapp

The clock is ticking for Nassau County to pay millions in tax refunds to home and commercial business owners.

Attorney Laureen Harris, head of Nassau's tax challenge bar, submitted a motion Friday asking Supreme Court Justice Thomas Adams to order the county to pay her clients -- who are owed $21 million in refunds -- by Aug. 1.

Harris and attorneys for the county say they expect Adams to sign the order.

Hundreds of other attorneys are expected to follow suit if the county is forced to pay the money, Harris said. Home and business owners are owed roughly $140 million in refunds, said County Attorney John Ciampoli.

The court proceedings come as Nassau scrambles to maneuver around legislative Democrats who are blocking Republicans from borrowing millions of dollars to pay the settlements.

"The county legislature has been focused on self preservation," said Harris. "And, they are abusing their discretion."

Plaintiff Joe Curcio, who said he lost his Hicksville real estate holding company to foreclosure when the county failed to pay him a $112,000 refund, said he and his partner "just want to be paid what we are owed. The politics they are playing has real-world consequences."

Ciampoli agrees that Harris' clients are legally owed refunds. But he said that having to pay them by Aug. 1 would "wreak havoc on the county's finances."

Ciampoli said he will present a "fiscal chaos" defense in the case next week. He will argue that paying Harris' clients "would disrupt the very foundation of government operations" because the county legislature has yet to approve the borrowing necessary to pay the refunds.

Ciampoli wants the court to provide Nassau with more time to pay the refunds or to agree to a payment plan.

The fiscal chaos argument dates to a 1971 case involving a homeowner in Suffolk County who argued that the entire assessment roll of the Town of Islip was illegal because homes were assessed at less than their full value. The State Court of Appeals refused to invalidate the roll on the grounds that it could bring fiscal chaos to the town.

Harris said the defense won't work because her case affects a small number of residents and not the public at large.

Harris said that if Nassau fights the payment deadline successfully, she has other options including asking the court to place a lien on Nassau's bank accounts. She said she also may ask the court to ask the State Legislature to intervene in the dispute.

State intervention is one of several remedies Nassau is considering after Democrats rebuffed efforts to borrow for tax refunds until Republicans commit to legislative redistricting that is "fairer" than a plan the GOP has proposed.

Nassau County Executive Edward Mangano wants the State Legislature to pass a bill allowing him to borrow for refunds without first getting approval of the legislature or the Nassau Interim Finance Authority, a state monitoring board in control of the county's finances.

NIFA has refused to authorize borrowing for refunds until Mangano finds $150 million in recurring labor savings.Earlier this week, Gov. Andrew M. Cuomo urged the county and NIFA to work together to solve Nassau's fiscal problems. Cuomo said bypassing the county legislature and the fiscal watchdog raises all sorts of questions."

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