Trouble for counties when taxes masquerade as fees
If a state judge’s decision and logic prevail, Laura Curran might find herself with an even more difficult set of budget challenges than she anticipated when she ran for Nassau County executive.
And Suffolk County’s leaders ought to be very worried, too.
In December, State Supreme Court Justice Anthony F. Marano ruled in favor of commercial property owners who sued Nassau County over fines assessed when they failed to file financial information with the county. The decision stated that because the fines were not intended to pay for assessment operations and were instead to be used “to balance the county’s budget,” they were unconstitutional, and were an illegal tax.
That decision would wipe out $5.2 million in revenue for 2018. But it also cast tremendous doubt on all of Nassau’s other excessive fees and fines implemented to avoid passing tax increases — and Suffolk County’s, too.
Marano cited several past decisions to show government fees and fines must be used to pay for a service or oversight they’re related to.
In Nassau, a $55 traffic ticket surcharge raises tens of millions of dollars. A $300 mortgage recording tax and a $355 tax-map verification charge on real estate transactions help the county clerk’s office, with a budget of $6 million annually, bring in about $45 million to the general fund. In Suffolk, thanks to the excessive fees charged on real estate transactions, the county’s Real Property Tax Service Agency brings in $66 million a year in fees on a budget of $1.2 million.
Although Nassau County is appealing Marano’s ruling, and a similar suit against Suffolk has not yet been heard, past case law is clear.
Fees and fines are to be used to pay for the services they’re related to. Everything else should be paid for with taxes. No matter how politically painful it might be. — The editorial board