A state appeals court has denied Nassau County’s attempt to shift the cost of refunding property-tax challenges to school districts and towns. The decision was reached unanimously on Feb. 27 by four justices of the New York State Appellate Division of the Supreme Court.
For more than 60 years, the county has been responsible for refunding homeowners whose property taxes were improperly assessed. The New York State Legislature amended the Nassau County Charter in 1948, adding in a provision called the “county guarantee,” which states that the county, and not the school districts and towns, must pay tax-certiorari refunds.
In 2010, Nassau County Executive Ed Mangano passed legislation, called the Common Sense Law, to repeal the guarantee, shifting the cost of refunds to school districts, towns and special districts, which Mangano said would save the county $80 million annually. Nassau would continue to collect revenue from tax liens, foreclosure sales, penalties and delinquent payments.
The decision outraged school superintendents, who argued that they have had to cut spending to the bone to balance their budgets during tough economic times. Having to reimburse property-tax refunds –– and incur the heavy legal fees that come with defending assessments that the county is responsible for making –– would only add to districts’ fiscal pain. The county’s Assessment Review Commission reviews property-tax challenges to decide whether homeowners have been erroneously assessed.
More than 40 school districts, 19 special districts and the Town of North Hempstead filed suit against Nassau over the county guarantee, claiming that the Common Sense Law violated the state Constitution. On Jan. 6, Nassau County Supreme Court upheld Mangano’s legislation, concluding that the county had the authority to adopt the Common Sense Law. School superintendents then took their case to the Appellate Division, which reversed the Supreme Court’s decision. According to the appellate court’s decision, the 2010 legislation conflicted with the Municipal Home Rule Law, which prevents the county from superseding any of its laws that relate to the distribution of tax proceeds or benefit assessments.
Brian Nevin, spokesman for county Executive Ed Mangano, said that the county intends to appeal the decision in the state Court of Appeals, adding, “It’s insanity for municipalities to collect taxpayer money in error and then refuse to refund it.
“Tom Suozzi created this mess, left behind $1.6 billion in debt, and his Democratic colleagues refuse to pay residents their rightfully owed property-tax refunds,” Nevin continued.
County Legislator Kevan Abrahams, a Democrat from Hempstead and the Legislature’s minority leader, said, “The Democratic caucus voted against the unconstitutional law of shifting this $80m annual cost onto school taxpayers. We’re all in this together, but we need Mangano to start delivering real solutions to the problem he promised to fix,” meaning the property-tax appeals process.
Dr. Henry Kiernan, superintendent of the Bellmore-Merrick Central High School District, said that districts across Nassau County would be forced to slash spending if the burden of processing tax-certiorari claims were shifted to school districts. He said that Bellmore-Merrick would take a $200,000 hit in legal fees in the first year of the shift, and likely much more in subsequent years, which would force the district to reduce spending further than it already has in recent years.
Governor Cuomo’s 2 percent property-tax cap has forced districts like Bellmore-Merrick to cut hundreds of thousands, even millions of dollars, in recent years, which has led to reductions in staff and services.
Kiernan said school officials worry that the county plans to appeal the Appellate Court’s decision, but for now, they are breathing easier. “We’re pleased…” Kiernan said. “It was certainly a victory for school districts at this stage.”
Scott Brinton contributed to this story.