North Hempstead orders Nassau to return tuition payment fees

North Hempstead has taken more steps to recoup $1.3 million with interest from sales tax revenue withheld by Nassau County to cover Fashion Institute of Technology tuition fees that the county believes the town owes it under state law.

Last week, the town served Nassau with an order to return the money, following recent decisions by the state Supreme Court in favor of the town.

Under state education law, counties must pay the difference between in-county and out-of-county tuition fees for residents attending community colleges in other counties — including Manhattan-based FIT.

In July, Justice Leonard D. Steinman ruled that the county owed prejudgment interest dating to April on the $1.3 million of withheld revenue. Nassau filed a notice of appeal, attempting to freeze the money, a move that was struck down last week by the Supreme Court’s Appellate Division.

“We asked them [Nassau] for the money politely and they give it to us, or we proceed to enforce the judgment,” town attorney Elizabeth Botwin said. “There is really no merit to the county’s position and I’m hopeful they’ll stop pursuing this and spend their time on more useful matters.”

The appellate division’s judgment upholds a May state Supreme Court decision that calls for Nassau to return the money in a legal battle over FIT reimbursement fees dating back a decade. Nassau has filed notices of appeal for each decision and the May ruling.

In 2010, Nassau started billing its municipalities for the difference. North Hempstead has been billed $5.2 million in FIT chargebacks since 2010, an amount that the town has not disputed.

But in June 2015, Nassau informed the town it would begin charging for the period from 2004 to 2009, and withheld $1.3 million for the 2004-05 school year from the town’s 2015 fourth-quarter sales tax.

The town sued Nassau over that claim, marking the town’s third lawsuit over Nassau’s use of chargebacks. Nassau has won one case, with a second lawsuit still pending.

In May, Steinman ruled that the statute of limitations for the county’s claim had expired, that Nassau could not collect for any years before 2010, and that the withheld sales tax revenue was to be returned.

The county has filed papers to appeal the decision, but last week’s Appellate Division decision means that the town can collect the tax revenue without “waiting for the county to perfect their appeal,” Deputy Town Attorney Amanda Abata said.

The town is in need of the funds and officials said the delayed payment has caused “continued financial hardship.” To cover the cash shortage, the town has borrowed from its highway fund, according to court documents. Town officials did not disclose the amount borrowed.