By MIKE CAPUTO
A provision added to the Real Property Tax Law (RPTL) in 1974 required municipalities to charge special districts for refunds issued for property assessment errors. Instead of doing that, however, Nassau absorbs the full cost of tax certiorari refunds without charging local entities, such as towns, school districts, and fire and water authorities.
According to government documents obtained by the Herald, late former state Sen. Ralph Marino and the late former Assemblyman Joseph Margiotta, both Republicans representing Nassau County districts in 1974, sponsored a request for an exception to the RPTL provision, which was approved by the state Legislature but vetoed by former Governor Hugh Carey, a
Democrat.
Nonetheless, Nassau County law guarantees the protection of special districts from paying tax refunds, shifting the full burden onto the county.
"Since the veto, the county has decided not to pay any attention and go about business as usual," said Legislator Roger Corbin, a Democrat from Westbury whose district includes a small portion of East Meadow. Corbin is currently the only county lawmaker to publicly propose a change in Nassau's policy on tax certiorari, a measure he said could save the county about $100 million. Other legislators have remained mum on the issue.
Nassau County, one of only two counties in the state to perform its own assessments, pays out about $80 million a year in tax refunds, according to Comptroller Howard Weitzman, who explained that, before 2000, previous administrations borrowed more than a billion dollars to issue such payments.
"No question, the county's unique obligation to pay tax refunds for towns, school districts and special districts is a major contributor to our financial problems and difficulties," Weitzman said.
At a legislative session on Feb. 9, county lawmakers approved $3.05 million in tax refunds in 10 separate cases.
Because the county takes responsibility for all property tax refunds, communities with larger commercial tax bases, like Garden City and Uniondale, and areas with little commercial property, like Westbury and Roosevelt, all pay the same share, which some experts say is unfair.
"Because the county is paying all of the tax refund, residents living in property-tax-poor neighborhoods like Roosevelt, having been included in the county tax, pay a share for tax refunds in commercially wealthy districts like Garden City," Weitzman said. "It is not fair."
"It forces people who live in poorer communities to bear a larger share of this burden of the mistakes in the wealthier communities that could probably afford and deal with them more easily on their own," said Lawrence Levy, a Hofstra government professor and an expert on Long Island politics.
The legal background
The county's guarantee has been upheld in past state appellate court decisions, including Bowery v. Board of Assessors of the County of Nassau in 1992, a case that involved several corporations seeking refunds for taxes that were believed to be issued erroneously.
According to the appellate court's decision, the county, not the school districts, was responsible for paying the refunds because of "unambiguous language" in Nassau's administrative code - the guarantee - that places the burden on the county for paying for errors related to property assessment.
Corbin said he has been in contact with attorneys at the local and state levels, and is seeking a clarification of the laws. He said he firmly believes that the county law is invalid, because state law supersedes local code.
A letter from a county attorney in response to Corbin's inquiry noted that Nassau's arrangement is "inconsistent" with the state RPTL, which requires the county to pay the refunds and then charge the towns, special districts and school districts for their portions. The attorney's letter also stated that the county "defied" state law's supersession of the county guarantee, a code that is "no longer valid law."
A "devastating" impact on schools?
The county portion of an average Nassau homeowner's property bill is about 17 percent, while the town and special districts (school, water, fire, etc.) account for the rest, officials said. School districts usually amount for more than 60 percent of the property tax bill.
Such a shift in responsibility of who pays tax certioraris for the schools and other special districts could place a burden on schools that could be "devastating," said Leon Campo, East Meadow superintendent.
Like the county, many school districts across the state are molding proposed budgets that could include major program cuts or employee layoffs to address what is expected to be serious decreases in revenue.
Levy explained that a shift in certiorari would likely heed compromises between the county and the special districts. The political expert said leaders should take time to assess and critique the current systems, which could lead to beneficial changes.
"It is time that the region takes a very big step back and looks at the way we run government services," Levy said, "whether it is the county, police or school classrooms, who pays for it, what's a fair share - a fair way of portioning the shares - and come up with something that works for the greatest number of people and doesn't put a greater burden on the poorest."
Comments about this story? MCaputo@liherald.com or (516) 569-4000 ext. 287.
Current system
Real property in Nassau is assessed by the county, and property taxes are collected by the Town of Hempstead and distributed to school districts, fire districts, sanitation and water districts, the Town of Hempstead and incorporated villages and the county.
The county gets about 17 percent of property taxes, the town gets about 15 percent, schools get about 60 percent, and the rest is divided among other special districts.
When a property owner files a successful grievance of his or her assessed taxes, the county refunds the amount successfully challenged out of county funds only - and county taxpayers share the burden. The county does not seek a refund from the school district, fire district, the town or village.
If a homeowner in East Meadow, for example, successfully grieves an assessment and is refunded, let's say, $5,000 per year going back six years, every county taxpayer repays that homeowner an equal share of the $30,000. This is based on the fact that the county does the assessing, and if the assessment is wrong, it's the county's fault, not the school district or other recipients of the property taxes.
The county pays out about $80 million in tax refunds annually, all from county funds. The county borrows to pay these tax certs.
Proposed system
Some say the present system is unfair. Why should a taxpayer in Valley Stream pay an equal share of an East Meadow homeowner's refund? Why shouldn't the other recipients of the taxes - the schools, the town and special districts - be required to return a portion of the money they received, regardless of who caused the over assessment?
Most of the refunds are paid in wealthier, commercially rich areas, forcing all taxpayers - even the poorest taxpayers - to share the expense, which has a disproportionately negative impact on those poorer homeowners.
Fairness, some say, dictates that school districts and all special districts refund money it has received in property taxes in its area. Then tax certioraris would be paid not by all taxpayers, but by all those entities that received the overpayments to begin with.
