State Supreme Court Justice Jack Libert ruled last week that District 24 “wrongfully withheld tax revenues” totaling more than $2 million in taxes from the high school district over a dispute that stems from tax incentives granted to the Green Acres Mall in 2014.
The Valley Stream Central High School District filed a lawsuit in June against the district in state Supreme Court in Nassau.
“While it is unfortunate that our district had to spend valuable funds to litigate this matter, we are satisfied that the ruling confirms our district’s position on how the school tax levy funding formula is calculated,” said Central High School District Superintendent Bill Heidenreich in an emailed statement. “We look forward to moving ahead and working in conjunction with all of our elementary districts to ensure the success for all Valley Stream students.”
District 24 must pay more than $2 million in taxes, plus interest, the judge ruled.
“We took this action on behalf our District 24 taxpayers because of the huge tax increases they received last year,” District 24 Superintendent Ed Fale said in a statement. “We argued that recent case law could be used to interpret the law differently. Even though we did not win in Court, we pledge to our taxpayers that we will continue this fight through lobbying for legislation on the state level to change the antiquated Education Law so that it includes payments-in-lieu-of-taxes.”
The $2 million that was in dispute was the result of the districts’ differing interpretations of what constitutes taxable property under state education law — namely, whether or not Industrial Development Agency-owned properties can be included in that category.
Of particular concern in Valley Stream is a New York state law that requires elementary school districts to collect taxes for centralized high school districts based on the elementary districts’ taxable property. District 24 argued that the high school district has the authority to include payment in lieu of taxes, or PILOT, properties, in its evaluation of how much to tax each component elementary district. The high school district successfully disputed District 24’s claim as of Justice Libert’s Nov. 2 ruling.
Each elementary district must pay a portion of the Central High School District budget, based on the taxable property in that elementary district.
But the Green Acres Mall, located in District 30, came off the tax rolls when the tax breaks took effect in 2016, which caused District 30’s payment to the Central High School District to shrink. That shortage was, and will continue to be, redistributed across District 13’s and District 24’s properties — affecting not only Valley Stream, but parts of Lynbrook, Malverne, Franklin Square, Elmont and North Woodmere that are included in those districts.
The Hempstead IDA abruptly revoked the tax breaks in April, claiming that the mall’s ownership failed to create the agreed-on number of jobs, but a Nassau County Supreme Court judge halted that decision in June, by issuing a temporary restraining order while the issue goes to litigation.
“We need [residents] help in reaching out to our state elected officials — Senator Kaminsky and Assemblywoman Solages, and ask[ing] them to change this law,” Fale said.