IDA headaches loom in spending plans

School District 30 held a budget forum on Feb. 2, at which school officials discussed the most recent draft of next year’s spending plan.

Though annual budget discussions are routine, at the center of the discussion this year was the Green Acres Mall, which received property tax payments in lieu of taxes, or PILOTs, which took effect in October.

The break will shrink the mall’s tax payments by about $6.5 million per year for 10 to 15 years, beginning this year, and shift the financial burden across the various classes of taxable properties in Valley Stream. On average, property tax bills increased between $322 and $758 in school districts 13, 24 and 30.

The Hempstead Industrial Development Agency approved the 15-year tax break in 2015 to foster economic growth in tandem with the mall’s expansion. For the duration of the PILOT agreement, the mall is removed from the county’s tax rolls, effectively reducing the assessed valuation of property in School District 30 — the metric by which the Central High School District is required by law to determine how much it collects from each of its elementary districts.

In the first year of the PILOT plan, the mall will make two payments to District 30, the village, town and county that will total roughly $14 million — one in October and one in June.

District 30 was criticized in an economic study commissioned by the IDA in November for underestimating its share of the $14 million PILOT, and thus levying more in property taxes than needed. Superintendent Nicholas Stirling previously said that, once received, any excess money would be applied to lowering next year’s tax levy. He said the district has not yet received the excess money.

Because the schools are budgeting for next year in between two large PILOT payouts, administrators said, there is a wide range for the proposed tax levy, or the portion of the budget funded by taxpayers.

The range for the 2017-18 tax levy is between $21.6 million and $23.6 million, which translates to either a 5.92 percent decrease or a 2.25 percent increase over the current year’s levy of a little over $23 million. The range exists because district officials used two different values as PILOT revenue in their tax cap calculations: the amount they’ve already received from the IDA, and the amount they were promised they would receive from the IDA in June.

“We must produce a number based on what we received,” said Christopher Dillon, the district’s assistant superintendent for business.

Additionally, the Nassau County IDA will hold a public hearing on Feb. 15 at noon at Village Hall to discuss an application by Sollecito Realty Co., to build an “automobile service center facility” at 364-370 W. Merrick Road. Any incentives that are granted to that property would also affect commercial property tax payments to District 30.

The shift to PILOT payments does not affect the tax revenue that schools collect, but adjusts the financial burden across the classes of properties. In Nassau County, there are four classes, each with its own tax rate: Class 1, single-family homes; Class 2, apartments and condominiums; Class 3, utility company properties; and Class 4, commercial properties. Each fall, the county votes on how much of the overall tax burden property owners in each of the four classes must bear.

Dillon also dismissed the misconception that a negative tax levy automatically translates to lower property taxes. The tax levy for the current school year was an 11.94 percent decrease from 2015-16, and yet many residents’ property tax bills increased sharply.

“As a homeowner, last year you paid 48 cents of every dollar that was levied,” Dillon said. “This year you paid 63 cents of every dollar … Even though the district levied less money, the Class 1 homeowner ended up paying more.”

Last week, Newsday published an unrelated report after an 18-month investigation that examined the changes in Nassau County’s assessment system implemented by County Executive Edward Mangano seven years ago. The report demonstrated an unequal distribution of the tax burden based on residents who challenged their assessments and those who didn’t, and found that the system was increasingly weighted against Nassau’s middle class, seniors, minorities and the poor.

All of the Valley Stream school districts are currently drafting their budgets. Updates are typically provided at regular Board of Education meetings, and additional information is available on the schools’ websites.