Thousands of Nassau property owners who had not challenged their assessments since County Executive Edward Mangano overhauled the process in 2010 filed appeals this year, raising the prospect of millions of dollars in savings for them and an even larger shift in tax burden from those who appeal to those who don’t.
The upsurge in first-time filers’ appeals — in record proportions — following three years of declines came during a tax season in which Newsday documented for the first time how Mangano’s overhaul had caused a $1.7 billion shift in taxes over seven years from those who had appealed successfully to those who had not. The series “Separate and Unequal,” an 18-month investigation that included several data analyses, determined that a typical taxpayer who had appealed even once experienced an increase of only $466 over the seven years. The typical non-appealer, whose properties tended to be worth less, absorbed an increase of $2,748.
A new data analysis establishes that the non-appealers got the message:
- Almost one in five of those who had not appealed before did so, nearly double the average share since the advent of Mangano’s program.
- With first-time filers increasing by 6,420 to 26,699, the overall number of appeals grew by the largest annual increase since the overhaul’s first year to a record of about 216,000.
- A record 12 percent of previous non-filers in minority areas, where the proportion of those who hadn’t challenged is among the largest, appealed for the first time, a development that will likely serve to narrow the unequal tax burden carried in those communities.
- A record 19 percent of previously unappealed homes owned by members of two of the most economically pressed populations — disabled residents and low- and middle-income senior citizens — filed for the first time.
- Aside from appealing in record numbers, the first-time challengers broke another record by filing more than ever before without the help of tax appeal firms, which charge fees that often amount to half of a property owner’s first-year tax savings.
Plainview resident Jennifer Gordon, 42, said she had been thinking about appealing for years with no idea of how widespread the success of the challenges was — fully 78 percent of those who appeal. She and her husband, Shalom, 43, decided to file on their own after reading Newsday’s investigation.
“When I saw the article I thought this is outrageous, because I thought we were suckers,” Jennifer Gordon said.
Overall, 72 percent, or 293,797 property owners, have filed at least one appeal since the overhaul began, according to Newsday’s latest data analysis. The remaining 112,143 unappealed properties will bear much of the cost of tax breaks achieved by those who appealed this year. Those costs reached $405 million for the last tax year, Newsday found in its investigation, and will grow by tens of millions of dollars by the time appeals filed this year are resolved.
The shift occurred over the years because the appeals shaved so much assessed value off the rolls that the county, school districts and other taxing authorities had to increase tax rates to maintain their budgets. The rate increases pushed up the tax bills of those without assessment reductions more than it did for those who won their appeals, resulting in non-grievants essentially paying for others’ tax savings.
The overhaul’s other main component, a freeze on assessments at their 2011 levels, amplified the shift by locking in the reductions into the future. In the first year, $138 million was shifted to those who didn’t appeal successfully, and that figure grew steadily each year afterward until the seven-year total reached $1.7 billion.
The Gordons got assistance in filing an appeal from Jeff Gold, a Bellmore attorney who helps property owners file claims on their own for free or for $300 with his direct help. Even before the Newsday series, Gold said membership in a Facebook group he operates doubled to 8,000 members this year as he gave free seminars sponsored by county legislators.
“People learned that it is easy to do yourself and that they can get their questions answered in a nonjudgmental manner,” Gold said.
County officials extended the period in which property owners could file a grievance this year from March 1 to March 17, once the day after the first part of Newsday’s three-part series was published and again due to a snowstorm.
Robin Laveman, whom Mangano appointed chairwoman of the Assessment Review Commission, which is the initial arbiter of challenges, credited the increase in appeals this year to two factors: an extension of the grievance period that occurred a day after Newsday began publishing its investigation, and workshops held by her office to help property owners file an appeal without hiring a tax firm.
“We held over 45 community meetings mostly attended by homeowners that had not filed previously,” Laveman said in a statement.
Both the commission and Newsday offered video tutorials on their websites on how to appeal without the use of a tax firm.
After reading Newsday’s investigation, County Legis. Siela Bynoe (D-Westbury) reached out to community leaders and sent a letter to her constituents highlighting its findings and the importance of filing.
She said the findings propelled elected officials and business leaders in her district, which has a substantial minority population, to “put a significant amount of effort into ensuring that the community was aware of the program and the ease of filing.”
The investigation found county officials had failed to promote or fully explain the importance of filing since the overhaul began and wrongly told some property owners who either attended workshops or tried to appeal on the county’s website that they wouldn’t obtain a reduction.
Strikingly, this year more than a third of first-time filers chose not to use a tax firm to file appeals. That is the largest share since the overhaul began. Overall, there was a record 59 percent increase in the number of appeals filed without the help of a tax appeal firm. That brought the total to 15 percent of all appeals, also a record. Filings by tax firms also increased 13 percent, from 159,206 to 180,210, just slightly more than the previous record.
Mangano’s overhaul was intended to fulfill a campaign promise to fix the assessment system, and particularly the county’s high cost of property tax refunds. The county owes the refunds whenever property owners win assessment reductions after their tax bills have been sent out, resulting in them being overbilled. At the time, the county was spending $100 million annually on refunds and had borrowed more than $1 billion to pay for them.
The high refund cost was partly due to a state law that requires the county to pay back not just the taxes it overbilled to the successful grievants but those overbilled by all of the nearly 300 towns, cities, schools and other agencies participating in the assessment system. It was also due to the tens of thousands of residential property grievances filed annually by tax appeal firms that were usually rejected after being challenged as unwarranted by county officials. The result was months of battling that often stretched on well after the bills went in the mail.
The overhaul sought to relieve the refund burden by offering reductions before tax bills went out that were so low tax appeal firms would settle their cases quickly. This substantially reduced the cost of residential refunds and allowed the county to lay off a third of its assessment-related workforce. Along with a more recent plan that covers commercial property refunds, the overhaul will save taxpayers between $115 million and $299 million through 2017, a Newsday analysis determined.
Mangano’s overhaul reversed years of successful efforts to improve the accuracy and fairness of Nassau’s assessments after the county settled a lawsuit alleging it was overtaxing minority homeowners in 2000, according to a Newsday study that showed the county’s residential assessments had fallen out of compliance with all major assessment accuracy and fairness standards.
A reassessment of all county property that could return accuracy and fairness to the system will be completed by January 2018 in time for the next grievance period, according to county officials. But the future shape of the system has already become an issue in this year’s race for county executive.
With help from Gold’s Facebook group, Old Bethpage resident Kathryn Kastner, 50, said she filed an appeal without the help of a tax firm using the county’s website.
“I couldn’t believe how easy it was,” Kastner said. “I did it on my phone on my lunch break sitting in my car.”
Kastner’s home had not been appealed since the start of the overhaul and she said ownership issues prevented her from appealing on her own until this year. She said the county’s property tax overhaul is not fair.
“It would be nice if it was just accurately assessed and everybody got their fair share,” Kastner said, “but with Nassau County nothing surprises me anymore.”
Behind the numbers
Newsday’s breakdown of the assessment challenges this year focused on 212,703 of the roughly 216,000 grievances. Properties that were excluded mainly include those owned by utility companies or those that did not pay taxes for a handful of reasons at least once since the county’s overhaul began in 2010. This was done to focus on properties affected by the overhaul, to allow for a comparison of properties over the length of the overhaul and to maintain consistency with earlier Newsday analyses.