Nassau County will appeal a ruling by a state Supreme Court justice that a $355 fee to verify a property's section, block and lot is “an unlawful and unconstitutional tax.”
If the fee is struck down, the impact on county finances could be far-reaching.
The county's 2020 budget projects $45.1 million in tax map fee collections, and Nassau, with a more than $3 billion annual budget, is bracing for significant revenue shortfalls stemming from the coronavirus pandemic. County officials have projected a $261 million operating deficit, the bulk of it due to a decline in sales tax receipts.
State Supreme Court Justice Jeffrey Brown issued the ruling on March 11, and the county attorney's office filed an appeal on March 21.
The fee was established during the administration of former County Executive Edward Magano. The county Legislature imposed a $50 collection fee in 2012, and the fee later rose to $75, and then to $225 in Mangano's 2016 budget. The Legislature raised the tax map verification fee to $355 in the 2017 budget.
The service fee is required to access, acquire, and maintain certified information on each tax map parcel used in any land document recording, according to the county website. Last year, 114,254 tax map verfication letters were issued.
Budget officials wrote in the county's 2019 report that: “If the fee is declared illegal in its entirety, the County would forego annual collections of up to approximately $43 million."
Nassau County took in $40.56 million from the fee in 2019, and $39.6 million in 2018,
Brown, in his ruling, said the fee for providing a tax map certification letter is “excessive” and not tied to its “responsibility to maintain its property registry."
The fees "were not assessed or estimated on the basis of reliable factual studies or statistics; and are far in excess of the costs necessary to provide the service of generating," tax map certification letters," Brown wrote. "As the fees associated with [tax map certification letters] are used to generate revenue; they are an unlawful and unconstitutional tax.”
Plaintiff Jeffrey Falk of Jericho filed a lawsuit in 2017, claiming the fees were "excessive and not reasonably necessary to maintain the county's real property registry and bear no correlation to the benefits conferred upon those people making the payments."
County officials argued in court papers the fee, “is not simply the cost of issuing, but also includes inspecting and regulating the regulated activity.”
County attorneys wrote that the “ongoing cost of providing assessment services for more than 400,000 individual taxpayer parcels [was] … an inextricable part of the overall costs of the assessment system and the costs of the county’s recent real property tax reform efforts, all of which are part of regulating and maintaining the tax map and system of assessments.”
Nassau County Clerk Maureen O’Connell, who opposed decisions to boost the fee, said the court decision "does not surprise me. I felt that it was unconstitutional from the day it was proposed.”
"It’s really just a money grab,” said O'Connell, a Republican. “A government fee has to cover the cost of the service. There is no service provided in this context.”
Revenue from tax map certification fees:
Source: Nassau County Comptroller