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Nassau owes $17.2M in refunds after property assessment challenges

Nassau County Executive Laura Curran introduces Quality Assurance

Nassau County Executive Laura Curran introduces Quality Assurance Unit to develop and review policy and procedures for Department of Assessment, ARC, and SCAR on  Jan. 17, 2019, in Mineola. Credit: Howard Schnapp

Nassau County owes $17.2 million to homeowners after losing thousands of legal challenges over property assessments in the 2020-21 tax year, the first of the countywide reassessment, county data obtained by Newsday shows.

The refunds are owed to 7,427 homeowners who won their assessment cases against the county after tax bills were mailed out in November, according to a new report from the nonpartisan Office of Legislative budget review.

In addition, settlements made before tax bills went out caused a shift of nearly $200 million in property taxes from homeowners who successfully fought their assessments to those who lost their cases or did not appeal, county data shows. Because the amount of money to be raised through taxes remains constant, any reductions granted to homeowners have to be made up by others.

Nassau publishes a tentative assessment roll in January of each year, telling owners how their homes are being assessed. Homeowners generally have until the end of April to appeal the values the county had assigned. Tax bills don't go out until October.

There are two steps in Nassau County's tax appeals process. The first is filing a grievance with the Assessment Review Commission. Those who lose at ARC then can file appeals in small claims assessment review, or SCAR.

For the 2020-21 tax year, a total of 80,000 taxpayers filed appeals through SCAR.

Nassau settled 58,000 of those challenges through a new mediation program designed to resolve cases quickly, according to a memo from Nassau's Office of Management, Budget and Finance.

Another 22,000 challenges that couldn't be settled moved onto SCAR administrative hearings, records show. And Nassau lost about 13,500 cases, including 7,427 cases won by taxpayers after the tax roll was finalized in the fall of 2020, according to the county's memo.

Because the nearly 7,500 property owners had already paid their taxes for schools and other jurisdictions, Nassau became responsible for refunding $17.2 million in overpayments.

The average refund was $2,267, according to the county's memo.

Nassau officials say that even with the refunds, the average amount of assessment reductions was roughly 4% in value, which they and a Westchester County assessor say is a small revision.

Nassau officials also said they had difficulty settling all the SCAR claims in time for publication of the tax roll because the coronavirus pandemic closed the courts and extended the deadline for filing assessment challenges from April 30 to Sept. 4, weeks before tax bills were issued.

Nassau County is responsible for refunding all tax overpayments made to school districts, and other jurisdictions, under a state law known as the "county guaranty."

Nassau owes the largest average refunds for 2020-21 largely to taxpayers in high-income, North Shore school districts and communities, according to the legislative budget review office.

Nassau is due to refund as much as:

  • $1.53 million to owners of 333 parcels in the Great Neck School District. The average refund is $4,590 per parcel.
  • $825,303 to owners of 234 parcels in the Port Washington School District. The average refund is $3,527 per parcel.
  • $707,286 to owners of 165 parcels in the Hamlet of Woodbury. The average refund is $4,287 per parcel.
  • $652,210 to owners of 189 parcels in the Roslyn School District. The average refund is $3,450 per parcel.
  • $641,942 to owners of 157 parcels in the Manhasset School District. The average refund is $4,089 per parcel.

The communities set to receive the smallest refunds from Nassau include:

  • The Roosevelt school district, where $5,617 is due to owners of 7 parcels. The average refund is $802 per parcel.
  • The Island Park school district, where $30,811 is due to owners of 22 parcels. The average refund is $1,400 per parcel.
  • The Valley Stream-24 school district, where $33,162 is due to owners of 37 parcels. The average refund is $896 per parcel.
  • The Valley Stream-30 school district, where $36,545 is due to owners of 44 parcels. The average refund is $831 per parcel.
  • The Malverne School District, where $45,991 is due to owners of 43 parcels. The average refund is $1,070 per parcel.

Nassau County Executive Laura Curran ordered the reassessment of all 386,000 residential properties in time for the 2020-21 tax year in a bid to create an accurate and fair assessment roll. Curran, a Democrat, is running for reelection this year.

Edward Mangano, Curran's Republican predecessor, had implemented a valuation freeze in 2011 and it lasted eight years. By the end of his term, properties were undervalued.

Under Mangano, a Republican, the county Assessment Review Commission settled roughly 80% of tax challenges during the period of the freeze. (Curran left the freeze in place during the 2019-20 tax year.) By giving automatic reductions to many filers, ARC shifted a large share of the property tax burden from those who challenged their assessments successfully to those who did not file or win grievances.

Deputy Nassau County Assessor Robert Miles said that despite the large refund tally for the 2020-21 tax year, the properties received on average reductions of roughly 4% in value, which represents small revisions to their original assessments. Miles said the 4% figure "speaks to the accuracy of the roll."

County officials could not say how much Nassau had refunded to residential property owners in the past before the reassessment. Newsday submitted a FOIL request for the data.

It was likely a small amount: The number of SCAR hearings ranged from 5,000 to 10,000 each year over the past decade, compared with the 80,000 filed last year.

Prior to settling the SCAR claims, ARC granted reductions to 61,118 filers in 2020-21, and the settlements shifted $87.2 million in tax burden from those who won reductions onto those who did not, according to the review from the legislative budget office.

"These savings represent a tax increase to nonchallengers and unsuccessful challengers," the report said.

Roughly two-thirds of the property owners who filed appeals in SCAR won reductions that were made before the tax roll was set. The reductions to those estimated 54,000 homeowners caused a tax shift of $105 million onto property owners who did not successfully appeal their assessments.

According to the report, some communities fared better than others in the ARC process.

In the majority-minority and low-income communities of Westbury, Roosevelt, and Hempstead, the percentage of successful challenges was 8.4%, 10.3%, and 11.1%, respectively.

The percentage was highest in Long Beach, at 51.6%; Lynbrook, at 43.5%, and East Rockaway at 42.7%.

Larry Clark, director of strategic initiatives for the International Association of Assessing Officers, based in Kansas City, Missouri, said in an interview with Newsday: "Until you get a good solid roll that everyone accepts, then it’s just going to be a matter of shifting the property tax burden."

He continued, once "you get down to a small number that are challenging it each year, the shifts will not be as noticeable."

The number of grievances filed with SCAR, for the 2021-22 tax year is roughly 60,000, compared with the 80,000 figure a year earlier, Miles said.

Edye McCarthy, town assessor of Greenburgh in Westchester County, a city of 91,000 people, said Nassau did many things right in its reassessment.

"Unfortunately, because of the timing, because of when you finalize your assessment rolls to send your tax rolls out, that’s a very short period of time," she said. "That’s why Nassau County has the refund [liability], they just didn't have enough manpower."

McCarthy said Nassau's average assessment reduction of 4% is small: "Nobody, nobody is that good to come up … with a market value today that's spot on."

Lloyd Tasch, president of the New York State Assessor's Association, said Nassau also has to defend huge numbers of appeals each year because law firms specializing in tax challenges file so many petitions.

The firms earn income by taking a portion — frequently 50% — of homeowners' tax savings if they win their appeals.

"It’s not so much a reflection of a bad reassessment, it’s simply the fact that the representatives are doing a splendid job of getting their message out, and if there’s no downside, why wouldn’t you" file a challenge, said Tasch, assessor for the City of White Plains.

But Legis. Steve Rhoads (R-Bellmore) said the task of settling the large number of challenges, "is a responsibility that the [Curran] administration asked for."

Administration officials "told us they would be able to get it done in time," Rhoads said. "Unfortunately, the way they handled these assessment challenges left them in a position where now we have to give refunds."

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