Nassau lawmakers learned Monday that a state court judge has continued a temporary restraining order that bars the county from collecting fines — possibly for years — based on a 2013 law requiring commercial properties to pay hefty penalties if they do not provide timely information to the county assessor about their income and expenses.
The decision creates a $15.8 million hole in this year’s budget and will make it even more difficult for county Executive Edward Mangano to balance next year’s projected budget, which is supposed to be submitted to the legislature Thursday.
Lawmakers had predicted that Nassau could collect as much as $70 million this year in fines after the county won a court decision last year that found Nassau had the legal authority to require companies to provide the information.
They toned down their expectations by proposing that this year’s budget reflect just $45 million in revenue from the assessment penalties. But the county’s financial control board, the Nassau Interim Finance Authority, was skeptical and directed the administration to lower the revenue estimates to $15.8 million.
Now, the county won’t even collect that.
A deputy county attorney told the legislature’s Rules Committee Monday that State Supreme Court Justice Anthony Marano last month had extended a temporary restraining order — issued when commercial tax attorney Laureen Harris appealed his decision last year — until the Appellate Division decided the case.
When asked when the Appellate Division would hear the appeal, deputy county attorney Martin Valk said case had yet to be put on the court’s calendar and the appellate court is “at least a year behind.”
So that’s one year.
However, Harris has two more legal arguments that Marano has yet to decide. Even if she loses both, that could mean two more years until those appeals are decided.
“This is part of the frustration of being in government,” said Legis. Richard Nicolello (R-New Hyde Park). “You look to our west and New York City has substantially the same law in place and has been in place for many, many years. Major corporations are paying their penalties and the city is collecting them. Here in Nassau, we’re still waiting. This has been going on for years for something, in my opinion, that will be found constitutional and appropriate.”
Harris disagreed vigorously Tuesday. She said Nassau does not have the authority under state law to enact such legislation, while the city does. And she said the city’s penalties are a fraction of Nassau’s penalties — 25 percent of market value.
Harris is arguing that Nassau’s fines are excessive and that the county is violating due process in how it imposes the penalties.
For example, she said, the county mandated that corporations this year file their information electronically by April 1. But the county’s website was down on April 1 and owners were penalized if they filed April 2.
She said the 90 percent of the commercial properties whose owners do not file the income and expense statements have a fair market value of $300,000 each.
“It’s the small guy, the mom and pops of our community, for which the county is seeking huge penalties,” Harris said. “This is not what New York City does.”