Central High School District preps to sue District 24 over tax spat in Valley Stream

The Central High School District has hired a special counsel in response to District 24’s refusal to pay more than what its officials deem to be a fair share of the tax burden — dealing a blow to the otherwise-agreeable relationship between the Valley Stream school districts since the start of the Green Acres Mall tax-break controversy last year.

“While we hope this matter can be resolved without litigation, the Valley Stream Central High School District Board of Education has a fiduciary responsibility to collect any and all revenue owed to our school district so that we can continue to provide students with learning opportunities both inside and outside of the classroom,” said Bill Heidenreich, superintendent for the high schools.

On May 9, the high school district Board of Education appointed special counsel from the Hauppauge-based Ingerman Smith LLP, at an hourly cost of $250, to represent the district in the event that it does not receive all of the tax revenue that it expects this year from its component districts. The outside counsel is necessary, Heidenreich said, because the Farmingdale-based Guercio & Guercio LLP firm represents the Central High School District as well as districts 13 and 30.

“The firm of Ingerman Smith represents over 50 Long Island school districts and has litigated a [Long Island Power Authority] PILOT,” Heidenreich said. “In addition, Ingerman Smith represents the Bellmore-Merrick Central High School District and, as a result, has a unique understanding of how central high school district boards of education operate.”

Ed Fale, the District 24 superintendent, agreed with Heidenreich that the districts each have a fiduciary responsibility, which is why, Fale said, the Board of Education plans to pay the high school district only what trustees believe is required under the law.

Central high school districts in New York state are funded by their elementary school districts, which collect taxes from their respective communities on behalf of the high schools based on the value of taxable property in their districts.

District 24 is contesting what should be considered taxable property because of tax breaks that were granted to the Green Acres Mall by the Hempstead Industrial Development Agency in 2015 and abruptly revoked last month.

Under payment-in-lieu-of-taxes agreements, or PILOTs, parcels switch to an agreed-on payment schedule and are removed from the county tax rolls. When the mall PILOT took effect in October, taxable property in District 30 was reduced, its payments to the high school district shrank and payments required of the other two elementary school districts jumped.

“Think of it like pieces of the pie,” Fale said. “So 30’s piece is smaller, so everyone else has to pay more.”

District 24 trustees suggested at a May 4 joint-boards meeting that the high school district has the authority to expand its calculation of taxable property to include parcels that are given tax breaks by IDAs. Lawyers for Districts 13, 30 and the high school district — all from Guercio & Guercio — said that District 24’s proposal is illegal. District 24 officials responded by saying that the district would not make payments beyond its own calculations in an effort to protect taxpayers.

Fale said he believed the change would increase District 30’s tax share, and decrease the other two elementary school districts’ shares, to pre-PILOT levels. According to its proposed formula, District 24 would owe the high school district only $18.1 million for the 2016-17 school year, rather than $20.1. The remaining $2 million, which would be the last payment of the year, would be held in an escrow account.

“The next payment is due this week, and at that point, we will not be making additional payments,” Fale said.