A lawsuit filed Tuesday against Suffolk County in state Supreme Court seeks to strike down $66 million in recent county fee hikes and force the county to refund a portion.
The complaint, filed by the Albany-based nonprofit Government Justice Center on behalf of five plaintiffs, says the fee increases on real estate transactions are “unauthorized taxes” that far exceed the $1.2 million budget of the county Real Property Tax Service Agency that provides the services.
The county increased its “tax map verification fee” from $60 per parcel to $200 in 2015 and added a new $300 fee for mortgage recordings in 2016.
The suit said the county was “unwilling to rein in its spending or face the political consequences of raising taxes to pay for general fund expenses.” Under state law and legal precedent, local fee hikes have to equal the cost of providing services, according to the lawsuit.
Jason Elan, spokesman for County Executive Steve Bellone, in a statement called the lawsuit “politically motivated.” Elan said the suit was “filed by Albany insiders who lack any understanding on how government costs are apportioned yet have no problem saddling taxpayers with the cost of fighting this completely frivolous complaint.”
The Government Justice Center’s board includes members of conservative government watchdog groups. They include the Empire Center for Public Policy and Reclaim New York, which is chaired by Rebekah Mercer, daughter of billionaire Robert Mercer, co-CEO of the East Setauket hedge fund Renaissance Technologies.
Suffolk County has struggled to close a $160 million budget deficit as personnel and health costs have climbed.
Bellone has promised not to increase county property taxes above the state-mandated tax cap of 2 percent. But the county has increased fees in recent years on parks, security alarms and real estate transactions. After public pushback this year, Bellone included no fee increases in his proposed 2018 budget, which is scheduled for a vote next month.
The lawsuit asks the court to strike down the real estate transaction fees altogether and refund the $300 mortgage fee to those who paid it. The county estimated the fee would bring in total revenues of $33 million this year.
“It’s straight up obvious the fees are being raised for the general fund,” said Cam Macdonald, executive director of the Government Justice Center.
The complaint cites debate at the Suffolk Legislature, which often centered on the need to approve the fee hikes to balance the county’s budget.
“If we vote against this, if it doesn’t pass, you’ve got a $33 million hole in your budget, and that hole will encompass programs that we put in place to be of help and assistance to the people of Suffolk County,” Legis. Thomas Barraga (R-West Islip) said of the mortgage fee at the Dec. 20 legislative meeting.
Lawmakers have warned that the large fee increases exceed the cost of providing services.
Legis. Robert Trotta (R-Fort Salonga) filmed the process of verifying the tax map numbers and processing the mortgage documents, which took a county worker 51 seconds. In the December meeting, Trotta warned other legislators, “if someone brings a lawsuit to us, this could cost . . . millions of dollars.”
At a February committee meeting, legislative Counsel George Nolan said fees had to be “roughly commensurate with government’s cost of providing services” or a court could strike them down. At the time, the legislature was discussing a doubling of a $55 fee on traffic tickets, which has failed to get enough votes to pass.