When former County Executive Edward Mangano froze Nassau County’s tax roll in 2010, he opened an ever-deepening wound in the assessment system. Mangano said he’d use the freeze as a chance to overhaul the system, but the fix never happened.
Instead, hundreds of thousands of residential property owners grieved their taxes annually and the county quickly settled nearly all those grievances with reductions. Mangano used this stopgap to avoid paying more refunds on money the county collects for school districts and other municipalities but must pay out itself.
This flawed decision created a system in which property owners who did not grieve their taxes were penalized more each year. The tax roll became divorced from reality. Nassau’s debt grew to $4 billion as refunds continued to be issued on commercial properties. And property-tax appeal firms made more than $500 million from their cut of the reductions. From 2010 to 2018, the median tax bill for properties where challenges were not filed increased $3,196, while the median tax bill on properties where challenges were filed increased just $698.
This growing inequity can’t continue. The county must create an accurate, defensible roll that allows it to charge all property owners fairly. But neither can this huge tax shift be fixed in one fell swoop, although that would be the fairest solution for the residents paying more than their share. Increases and decreases of 20 percent or more would not be unusual if the system were corrected all at once.
Last week, County Executive Laura Curran issued an executive order that reduces Nassau’s level of assessment, the fraction by which property values are multiplied to come up with their taxable value. The change makes it legal to assign fair values and levy fair taxes for the 2020 tax roll, which will be tentatively set in January. But while Curran wants an accurate roll now, she would rather spread fixing the imbalance over five years to soften the blow.
Huge tax increases are not fair to homeowners who simply did what their elected officials encouraged them to do: appeal. Rebalancing the system in one year could drive cash-strapped residents out of their homes. And coming on the heels of federal tax changes that have imposed a $10,000 limit on deductions for state income and local property taxes, it could upend Nassau’s real estate market, punishing everyone.
Fixing the system gradually rather than all at once will require action from the State Legislature. Greenburgh Town, in western Westchester County, reassessed to fix a broken system with a three-year phase-in starting in 2017. Three years might be fairer in Nassau, too.
There will be opposition from residents to any change that increases their taxes, and politicians will be tempted to listen. There also might be opposition and litigation from those who’ve overpaid and want an immediate, total fix. Politicians will be tempted to listen to them, too.
And county and state legislators should listen — to the people and the data. Then they must lead. The system is careening down a treacherous path. The course must be corrected. But it should not be turned so abruptly that the real estate market or the ability of residents to afford their homes is toppled. — The editorial board