N. Hempstead Town to sue Nassau County

The Town of North Hempstead has filed suit against Nassau, arguing that the county has no legal authority to withhold the town's sales tax revenue in order to subsidize the tuition of local students who attend Fashion Institute of Technology in Manhattan.

Last month, Nassau's Office of Management and Budget notified North Hempstead, Hempstead and Oyster Bay that it was diverting a portion of their share of county sales tax revenue to pay FIT for out-of-county students.

North Hempstead would lose $1.17 million in 2010 sales tax revenue because of reimbursements for 165 students. The town argues in its lawsuit, filed Friday in State Supreme Court, that the county's plan is "illegal, arbitrary and capricious."

"You can't just take money out of various funds because you need it," Town Supervisor Jon Kaiman said.

Counties in New York must reimburse out-of-county community colleges that their residents attend. Since 2001, Nassau has covered the FIT charges. But faced with a $176-million deficit for 2011, the county is effectively passing the fees on to the towns.

"North Hempstead is clearly responsible for charges relating to its residents who attend FIT," said County Attorney John Ciampoli.

Nassau is withholding $3.2 million in sales tax funds from Hempstead town. Spokesman Mike Deery said Hempstead disagrees with the policy and is "considering every option, including litigation." An Oyster Bay spokesman did not return calls.

Suffolk does not pass the costs for FIT to its towns.

The suit argues FIT no longer qualifies as a community college because it offers four-year, advanced-degree programs and two-year associate degrees. Counties are charged $10,980 per student for any degree.