Nassau County officials are racing to defend the county's new tax roll, with only a few weeks left this summer to deal with up to 100,000 property tax protests that built up after the county denied record numbers of appeals and courts were shuttered due to the coronavirus pandemic.
Failure to settle the cases by early August could force the county to pay millions of dollars in refunds to property owners who win reductions after school tax bills are set in late summer.
That's because of the "county guaranty," a clause in the county charter that makes Nassau responsible for refunding homeowners who are overassessed. The county owes taxpayers for all overcharges, including on school tax bills, which comprise the largest chunk of the property tax payment.
If the Department of Assessment or a court hearing officer approves an assessment reduction by early August, the change can be reflected in school tax bills issued in October. If the reduction is granted later, Nassau must refund the homeowner who overpaid.
Officials say resolving the challenges quickly and accurately also is crucial because the county is expecting massive revenue shortfalls due to the economic shutdown caused by the pandemic. Nassau County Executive Laura Curran has projected a budget deficit of $384 million for 2020.
“The worry is that once these cases go beyond the date in which we can finalize the tax rolls in October, any refund, any settlement or anything after that date becomes a full county charge," said Legis. Richard Nicolello (R-New Hyde Park), presiding officer of the county Legislature.
The scramble to dispose of the tax challenges comes as Nassau is in the final stages of its first countywide property reassessment after the tax rolls were frozen for eight years under former County Executive Edward Mangano.
Under the Mangano program, Nassau granted automatic settlements in an effort to avoid having to pay large judgments under the small claims assessment review process known as SCAR.
The result was fewer court cases and fewer refunds to taxpayers, although property owners who did not grieve their taxes ended up shouldering a larger share of the tax burden.
Nassau is bracing for a surge in cases this summer — up to 100,000 of them.
Taxpayers filed only 8,400 cases through the courts in 2019, and 8,109 in 2018, according to county records, because the preponderance of homeowners who filed grievances had received automatic reductions under the Mangano freeze. In 2019-20, the Assessment Review Commission granted 174,281 of 218,689 grievances — nearly 80 percent.
The freeze expired after the 2019-20 tax year.
Homeowners were supposed to have had from April 1 until April 30 this year to appeal their denials.
But because of the shutdown during the pandemic, courts closed beginning in mid-March, and have begun to reopen only recently. Nassau did not begin accepting SCAR filings until May 25, and extended the filing deadline until July 6.
This year, the county received 236,372 tax challenges but granted reductions to only 61,110 homeowners, or 26%, the smallest reduction in years. Assessment officials predict 50,000 to 100,000 of those who didn't get reductions will appeal by the July 6 deadline.
To reduce the caseload, the county has launched a mediation program aimed at settling the cases without having to go through the courts. The process relies on computer modeling to produce settlement offers based on comparable market sales in the surrounding neighborhood.
"The coronavirus has shortened our time frame to be able to resolve these cases by two full months," County Assessor David Moog said. Moog said the county was encouraging taxpayers to file as soon as possible to ensure a hearing is scheduled swiftly.
County officials say they are as ready as they can be for the July 6 deadline for challenges.
The Department of Assessment has 35 to 40 employees to handle SCAR proceedings, up from 12 last year. Some employees who calculated the property values have been trained to defend them, Moog said.
County officials could not say how many property owners they expect to participate in the mediation program, or how many settlements it may produce.
But a pilot program has shown the potential for speeding-up negotiations.
On May 25, two major tax appeal firms, Property Tax Reduction Consultants, Inc. and the Maidenbaum Property Tax Reduction Group, submitted 6,000 cases to the assessment department for review. By May 27, Nassau had responded with numerous offers of assessment reduction, county officials said. Negotiations are continuing in the cases, and filers or their attorneys can move cases to an administrative SCAR hearing at any time.
Maidenbaum said the "pandemic has impacted nearly every part of society, and our courts are no exception. Due to the near total shutdown of the court system, thousands of Nassau homeowners still await a meaningful review of their claims. We stand ready to advocate for our clients as soon as practicable and we firmly believe that the public interest requires a speedy and fair resolution of homeowners’ grievances."
The state court system has said the county can expand the pilot to include all filers.
"We believe the cases we made offers on would probably be given [reduction] offers in SCAR," Moog said of the mediation program. He said the county was working to resolve the cases "to the benefit of both the taxpayer and the county, quickly."
But Moog said, "We're not just here to slash and burn and get rid of cases — we're here to analyze cases."
Nassau Legis. Steve Rhoads (R-Bellmore) said the SCAR process will test the promise by Curran, a Democrat, that the countywide reassessment would produce an accurate assessment roll that could hold up in court.
"All along, the administration has been saying this roll is as accurate as it could be, but this SCAR process is really where the rubber meets the road," said Rhoads, a frequent critic of the reassessment.
Rhoads acknowledged, "it would have been a herculean task under normal circumstances to reach a final determination …," in the thousands of expected challenges.
"Now, it’s going to be that much more impossible to meet that deadline, which means you'll have more cases decided after the bills are already out, after the residents have already paid their taxes, and if they're successful, that will result in a refund," Rhoads said.
Nicolello said, "the volume of resolving all those cases is extremely difficult — unless you are going to do what the Mangano administration did, which was this mass settlement program … "
But that "led to a roll that wasn’t accurate anymore," Nicolello said.
Nassau County Clerk Maureen O'Connell, a Republican whose office collects the challenge filings, said she was bracing for electronic filings as the courts move to a planned virtual hearing process.
O'Connell recalled a time a decade ago when representatives of tax grievance firms appeared in her office with red wagons full of stacked paper filings — a sign that "the circus comes town, so to speak, and the paper filings were in the thousands."
During the pandemic, some elderly residents drove to the clerk's office to drop off paper filings, entering the building at 240 Old Country Rd. wearing protective masks. O'Connell said instead of asking them to return once the filing period had opened, she collected the challenges.
"The challenge, particularly for the court side of this, is going to be triaging the cases that can be mediated and disposed of in that format, versus cases that will be heard," O'Connell said of the impending filing deadline.
"I think all the parties are hoping to dispose of these in some kind of efficient way, so that this does not cause a huge cumbersome process," O'Connell said. "But it's very early in the process now, and we’ll see how this proceeds."