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Nassau homeowners waiting for tax refunds

Harold Herman stands in front of his Fordham

Harold Herman stands in front of his Fordham Lane home in Woodmere. (May 1, 2012) Credit: Newsday/Danielle Finkelstein

From Great Neck to Massapequa, nearly 17,000 Nassau homeowners are awaiting refunds for overpaid property taxes.

County lawmakers have been squabbling since December over County Executive Edward Mangano's plan to borrow $102 million to pay tax refunds -- mostly for commercial property owners.

About $20 million of the total is owed to homeowners who won decisions in small claims court last year lowering their assessments.

The average residential refund for overpaid taxes is $1,121, records show. But the amounts vary widely, ranging from a high of $27,074 due a Hewlett homeowner to a low of 62 cents owed a Freeport couple.

"In this economy, I'll take what I can get," said Long Beach homeowner Patrick Bellantoni, 73, a disc jockey due a refund of $9.98.

Victoria Gotti, who starred in a reality show at her Old Westbury mansion, is due a refund of $18,551, while the new chairman of the Nassau Industrial Development Agency, Timothy Williams, is owed $20,120 on his Locust Valley home.

Three county administrations have struggled to fix the county assessment system and reduce the number of refunds owed property owners who were overassessed. But residents continue to file large numbers of grievances -- more than 135,000 of them during this year's challenge period, according to assessment records.

Meanwhile, Nassau still pays an average of $100 million a year in refunds, and has borrowed to finance some or all of the costs for more than a decade.

Currently, Massapequa homeowners are owed the largest number of refunds while Great Neck residents are owed the most money. And refunds are clustered in some communities, records show.


Taxpayers follow neighbor

Along Fordham Lane in Woodmere, 22 homeowners are owed money for overpaid taxes -- one in every three homes along a four-block stretch. Refunds owed range from $133 to more than $3,500, records show.

"What happens is the professionals who are handling this contact you if your neighbor or somebody up the block is getting [a refund] and say that you could get one also," said Harold Herman, who is owed the highest refund on Fordham Lane: $3,549.

Records show that at least six different tax reduction firms worked for homeowners along that one Woodmere street. The firms get a percentage of the tax savings -- usually one-third to 50 percent -- if they are successful in winning an assessment reduction.

That means these firms will receive as much as $10 million of the $20 million owed countywide.

"You get a reduction and then they immediately increase the taxes afterwards," said Herman, who is a lawyer. "So you have to keep at it. It's like a game to play and all it is is money for the attorneys who are handling it."

In his efforts to fix the system, Mangano hired an outside firm last year to settle protests before taxes become due. He eliminated a guarantee to repay taxes for schools and towns. And he says he will freeze assessment increases, except for new construction, for four years to cut down on challenges.

But property owners continue to file grievances: 135,126 protests were filed during the challenge period of Jan. 1 through March 1 this year, including 110,481 residential protests. Last year, 137,361 protests were filed; 118,655 the year before that and 126,241 in 2009.

"People are still incensed by overpaying government by even $1," said attorney Fred Perry, who represents hundreds of homeowners each year in Nassau who protest their assessments. "That's their feeling and their right."

Fueled by high tax rates

Mark Miller, an attorney with the Rosenbaum & Maidenbaum law firm, which rivals Perry for filing the most residential protests, said, "Part of it is because of the sheer frustration with the high tax rates."

Mangano said that despite past problems with the assessment system, "the good news is that I have implemented reforms to correct taxes before demanding payment from taxpayers."

Nassau gave Newsday a list of the residential refunds after Mangano asked the county legislature in December to authorize borrowing to pay them. Since then, the county treasurer has paid 843 small claims refunds, totaling $1,128,581, from previously borrowed funds, Mangano's office said.

Democratic lawmakers have refused to approve any new borrowing without assurances of a "fair" redistricting process. The New York State Court of Appeals last year rejected a Republican redistricting plan.

Perry and Miller say the number of tax protests will eventually dwindle as assessments move closer to actual market values. But they also note that the level of assessment -- a technical calculation challenged by tax firms -- is not decided until after the grievance period ends. That encourages property owners to file "precautionary" grievances.

Perry represented Victoria Gotti in winning her $18,551 refund -- the fourth highest in the county. "She lives in Old Westbury, a problematic area for taxpayers because of school district issues," Perry said. Old Westbury, where 151 homeowners received refunds, boasts the highest average, at $3,678. The Westbury school district, which includes a mix of large estates and homes with modest values, has had ongoing budget problems and personnel issues.

"The lion's share of the refund is school taxes," Miller said.

The Maidenbaum firm represented the Hewlett homeowner who is owed the largest tax reduction countywide, as well as the IDA chairman Williams' house. Williams did not return a call for comment.

The second highest refund of $26,166 is owed to a Great Neck homeowner represented by the law firm of Koeppel Martone & Leistman.


'Assessment perfect storm'

Attorney Donald Leistman said the refund resulted from an "assessment perfect storm." The county assessor did not apply a previously granted assessment reduction as the housing market went into free fall, Leistman said. At the same time, the tax rate on the Great Neck house increased by 15 percent. "You put all these together, that's how you get this overassessment and overtaxation for one year," Leistman said.

For homeowners, protesting their taxes is a way to fight back. Kenneth Kerman, 70, who has lived on Fordham Lane in Woodmere since 1986, began grieving his taxes a few years ago.

"It seems to make sense," said Kerman, a dentist. "It's becoming horrifically expensive to live out here."

Glen Cove resident Susan McCormack said she hasn't grieved her taxes in about three years, and had no idea the county still owed her money -- $6.47.

"I am surprised that we get a little bit back at this point," said McCormack, whose husband, John, works in Newsday's advertising department. "We probably should grieve again."


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