It is perhaps the worst-kept secret in Nassau County: The property assessment system is broken. The county owes hundreds of millions of dollars in tax refunds, the result of successful assessment challenges by residential and commercial property owners, and county officials have tried, and failed, multiple times to fix the system.
At the request of County Executive Ed Mangano, the Republican-controlled Legislature voted in 2010 to repeal the “county guaranty,” which requires Nassau to pay 100 percent of all refunds for overpaid property taxes, even though county taxes account for only 20 percent of a total tax bill. In effect, school districts and towns receive 80 percent of property-tax overpayments, but must pay back nothing when assessments are successfully challenged.
The State Legislature instituted the guaranty in 1948, at the county’s request. Back then, Nassau had a fraction of the properties it does today, and county officials agreed to be held responsible for assessment mistakes. Now Nassau is the only New York county that guarantees it will pay property-tax refunds on behalf of local taxing districts.
Repeal of the guaranty, which was supposed to take effect this year, would have made school districts and towns liable for up to $100 million in tax-certiorari judgments annually, which could have forced teacher layoffs. In 2011, however, 41 school districts collectively sued Nassau County. On Feb. 18, the New York State Court of Appeals, the state’s highest court, ruled the repeal unconstitutional. Only the State Legislature can levy or adjust taxes, the court said.
So, what now?
There’s been more talk lately about having towns and cities assess properties, rather than the county. Local assessments would likely be more accurate and reduce successful tax challenges. And with the county out of the picture as the assessing agency, it would no longer be responsible for guaranteeing refund payments.