Nassau to use outside appraiser on tax appeals

A new Nassau program to settle property tax protests using an outside appraisal firm instead of county workers aims to save money by speeding thousands of residential property tax challenges through the system.

Homeowners would learn sooner whether their assessments will be reduced, and the county could cut the $100 million in tax refunds it now pays annually if decisions are made before tax bills are generated, officials and attorneys said yesterday.

If it works, "it is a major reform," said residential tax attorney Fred Perry. "We'll know the answer in a few weeks."

Perry's is one of eight tax-appeal firms that signed a court stipulation Tuesday calling for all pending residential protests filed in 2009 and 2010 to be negotiated and settled by the county attorney, using property values developed by an outside appraisal firm - Standard Valuation Services, operated by Matt Smith. The court order does not address whether the program covers 2011 appeals, which can be filed through March 1.

Nassau has always used outside appraisers as needed: Smith, who could not be reached Thursday, did work for the former administration of Republican County Executive Thomas Gulotta, assisted in the 2003 countywide reassessment, and also did appraisals for the administration of former Democratic County Executive Thomas Suozzi.

But now a major function of a county agency - the Assessment Review Commission - is being privatized.

ARC is supposed to decide both residential and commercial tax protests before tax bills are generated. But the agency typically reviews only a fraction of the more than 120,000 total challenges filed each year.

Commercial property owners can appeal in State Supreme Court, while homeowners file their cases in Small Claims Court. By then, however, they usually have already paid the higher tax bills and are due refunds if their assessments are reduced. The new program, however, only addresses residential protests.

"They're basically having Matt Smith do what ARC was supposed to do last year and should be doing right now," said Legis. David Denenberg (D-Merrick).

County workers who were processing the residential cases remain in limbo. They have been called to a meeting Friday where they expect to learn more about their future.

Jerry Larichiutta, president of the Civil Service Employees Association, said about 40 employees are involved. "I'm very concerned," he said, vowing to protect their jobs.

County officials would not disclose details of what Smith's firm will be paid. "Standard Valuation Services is compensated based on the caseload and number of settlements. It is estimated that taxpayers will save tens of millions of dollars," said Brian Nevin, a spokesman for County Executive Edward Mangano.

Although the county says the program is open to any homeowner who files a grievance, Denenberg contended that it appears to give preferential treatment to the tax lawyers.

But Shalom Maidenbaum, a tax appeal attorney, called it "a common-sense program." He said judges always try first to get both sides in a dispute to settle before going to trial.

In the past, he said, small claims appeals were heard by a mediation panel. But in recent years, "the county was treating the taxpayer as an adversary, to win at all costs," Maidenbaum said. "It hurt the taxpayer and hurt the county. This is bringing sanity back to the process."