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State lawmakers pass overhaul of Nassau tax challenge system

Nassau County Executive Ed Mangano has extended the

Nassau County Executive Ed Mangano has extended the deadline for filling property tax grievances until Friday, March 7, 2014. Credit: Howard Schnapp

A bill to overhaul Nassau's assessment grievance system, which county officials contend will save $80 million per year in borrowing costs, cleared the State Assembly and Senate yesterday and awaits the signature of Gov. Andrew M. Cuomo.

Also Friday, the Senate approved the transfer of the Freeport Armory from the village to a local nonprofit group

by a vote of 55-5. The Assembly had passed its version of the bill, which was sponsored by Deputy Speaker Earlene Hooper (D-Hempstead) but opposed by Freeport Mayor Robert Kennedy, on Monday.

by a vote of 101-33The assessment proposal, also sponsored by Hooper, would require commercial property owners who grieve their taxes to pay into an escrow fund pending the outcome of their appeal. Money from the account would then be used to pay property tax refunds, for which Nassau borrows $80 million a year.

The Assembly passed the bill 93-36 while the Senate approved the measure 56-3.

Nassau County Executive Edward Mangano, who proposed the plan, said that with the legislation "homeowners will no longer subsidize commercial property tax refunds and the county now has a path to end its 60-year, billion dollar reliance on borrowing," to pay for tax settlements.

Some business owners have expressed concern that the plan will drive up taxes while school district officials have questioned the impact it would have on school budgets. Mangano said the districts will receive 100 percent of the taxes they are requesting from commercial property owners.

If Cuomo signs the bill, the system would begin in January 2015, when Nassau sets its tentative assessment roll for 2016. Commercial property owners would be able to file tax protests through March 1, 2015.

If those protests can't be settled by April 1, 2016, when the roll becomes final, the assessor could grant assessment reductions of up to 10 percent while the challenge continues. That lowered assessment roll would be used by schools, towns and other taxing jurisdictions to set their tax rates. When assessed values drop, tax rates must increase to bring in the same amount of money.

School tax bills would go out in October 2016 based on the lowered assessment roll. County, town and general tax bills would go out in January 2017.

At that point, the county would bill commercial property owners for the difference in taxes calculated by using the old disputed assessment multiplied by the new tax rates. That money would be put in escrow. If the property owner wins an assessment reduction, the escrow fund would be tapped to pay his refund. If he loses, the money he paid into the fund would go to the taxing districts.

The Freeport Armory bill would transfer the property to the Cedarmore Corporation, a nonprofit that works with at-risk youth. Kennedy, a Democrat, wants to relocate the village's public works department to the armory.

Freeport Village Attorney Howard Colton wrote to Cuomo yesterday, urging him to veto the measure, as Cuomo did last year with a nearly identical bill. Without use of the armory, Colton said, the village would be forced to spend up to $23 million to fix the existing public works building, which was badly damaged during superstorm Sandy.

106-31 for a bill by Hooper to require projects receiving tax exemptions by the Nassau or Hempstead Industrial Development agencies to get approval from the respective village boards and mayors.

With Yancey Roy

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