Green Acres Mall's tax exemption complicates tax levies

Tax exemptions granted to the Green Acres Mall and the Long Island Power Authority have forced District 30, and by proxy, the Central High School District, to significantly reduce their tax levies for the 2016-17 budget, though the financial implications to taxpayers throughout Valley Stream won’t be clear until the fall.

The Town of Hempstead IDA issued the exemption for Green Acres Mall in the form of payments in lieu of taxes, or PILOTs, to help foster economic growth in the area, which changes how the school district must calculate its allowable tax levy limit.

“The job of the IDA is to provide tax incentives to provide economic growth and enhance job recruitment,” said Fred Parola, executive director of the Town of Hempstead IDA. “The board voted unanimously to provide those benefits … obviously this is a major facility and one that is undergoing a tremendous overhaul with new stores, new jobs, and the board discerned that this is why we’re here.”

PILOT payments are factored into each school district’s tax levy calculation, and since next year will see a dramatic increase in PILOT revenue, District 30 (and the Central High School District) must reduce its levy limit. District 30’s tax levy for 2016-17 will be reduced by 11.94 percent over the current year, and the Central High School District’s will be reduced by 4.42 percent.

The shift to PILOT payments does not affect the tax revenue that the schools collect, but the financial impact of the tax exemptions will be distributed across the different classes of properties across Valley Stream by the Nassau County Assessor’s Office in September. In Nassau County, there are four classes of property, each with its own tax rate: Class 1 is for single-family homes; Class 2 is for apartments and condominiums; Class 3 is for utility company properties (LIPA) and Class 4 is for commercial properties like factories, offices and stores. Each year in the fall, the county determines how much of the overall tax burden will be paid by property owners in each of the four classes. The Nassau County Assessor’s Office adjusts tax rates of each class to ensure that the district receives exactly what was levied.

In addition to the Green Acres Mall tax exemption, New York state law limits the amount of PILOTs school districts can collect from LIPA (the company began making the payments to school districts across Nassau County last year), which has also contributed to driving the school’s allowable tax levy down.

“The budget is going up by 1.38 percent,” Central High School District Superintendent Bill Heidenreich said. “The reason the tax levy is going down is because the money is coming from a different pot, in the form of PILOTs.”

By further extension, the rest of Valley Stream’s school districts will also be touched by the tax exemptions at the Green Acres Mall. Since District 30 will not be collecting as much for the Central High School District’s budget in property tax payments, Heidenreich said it was likely that this would be made up for by increasing District 13’s and District 24’s portion of the Central High School District levy.

“My estimate is that what will happen is that you might see taxes go down as a result of the PILOT in District 30, and go up in District 24, and District 13.”

School officials stressed that this does not affect the districts’ adopted budgets, and that the power to grant PILOTs and set tax rates for each property class are out of the school districts’ control.