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Hempstead Town withholds $30M in property taxes from Nassau

Hempstead Town Receiver of Taxes Don Clavin speaks

Hempstead Town Receiver of Taxes Don Clavin speaks after being sworn in during the Induction of Officials ceremony at Hempstead Town Hall Tuesday, Jan. 5, 2016. Credit: Barry Sloan

Hempstead Town is withholding $30 million in property taxes due Nassau County just as Republican County Executive Edward Mangano is proposing to close a multi-million dollar budget gap by increasing fees by more than $80 million next year.

The Republican-controlled town obtained a court order Friday directing Hempstead Tax Receiver Donald Clavin to withhold the money from the county, town spokesman Michael Deery said Monday.

“Nassau County is improperly withholding monies that are due and owing to Hempstead Town,” Deery said. “It’s unfortunate that we’ve had to take this step to protect our taxpayers.”

The dispute mostly involves reimbursement of millions of dollars in property tax refunds the town paid utility companies, but also includes a smaller amount of tuition payments that Hempstead says it was overcharged by Nassau for town residents who attended the Fashion Institute of Technology, Deery said.

The utility tax cases go back decades, starting when the old New York Telephone Company sued Nassau’s three towns, arguing that it was owed refunds for property taxes paid on equipment in town garbage districts that had been improperly included on the county’s assessment rolls. Successor Verizon, joined by other utilities, eventually won their cases. After borrowing millions of dollars to pay the tax refunds, the towns demanded reimbursement from Nassau under the “county guaranty,” a state law requiring Nassau to pay the cost of tax refunds stemming from erroneous assessments.

Although the state’s highest court has twice upheld the county guaranty, Nassau continued to fight reimbursement, paying Mangano’s former law firm $3.35 milion to challenge the decisions.

Representatives of Mangano did not return a request for comment. But county Comptroller George Maragos said, “Our expectation is that the town of Hempstead will pay in full all monies collected on behalf of Nassau County as they are legally obligated to do and as the Receiver of Taxes is personally liable.”

Clavin referred all comment to Deery, who said the town is “confident in its position on this matter.”

Oyster Bay in March withheld $44 million in general taxes from Nassau in an attempt to get reimbursed for the taxes the town refunded to utilities. The county eventually agreed to pay the town a total $26.7 million in two payments.

North Hempstead also is seeking tax refunds and FIT reimbursement from the county. But spokeswoman Carole Trottere said North Hempstead “has no current plans to seize county money.”


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