Richard Fromewick Authors LIBN OpEd, Property Tax Refunds Held Hostage

Publication Source: Long Island Business News

The latest report that property taxes are skyrocketing in Nassau County due to bills that have come due on the 2012 reassessment shouldn’t have come as a surprise to anyone who has been tracking the crisis.

Until now, Nassau County officials tasked with addressing this tax certiorari issue have been living in a hall of mirrors, trying to find some solution, any alternative, to the grim reality now staring them in the face.

Nassau County Executive Ed Mangano maintains that the real estate tax situation is slowly improving. Acting County Assessor James E. Davis has been making reductions of assessments but, of course, that comes with increases in the tax rates. What good is a 15 percent decrease in the assessment if the tax rates increase by 25 percent?

Even more frustrating is the mathematical reality that if your assessment decreases by 20 percent your taxes will have to increase to make up the difference.

Mathematically speaking, if budgets increase and assessments decrease, tax rates must also increase. The claim is also made that there are less monies being paid in refunds. Of course, it is because most of the refunds owed by the county are not being paid. Total court orders online at the treasurer’s office requiring the county to pay refunds are estimated to be between $50 million and $60 million.

Thousands of residential taxpayers are collectively owed around $18 million and commercial properties are owed at least twice as much. There are many millions more of settlements not yet reduced to orders.

The real estate tax refunds being held up are not monies belonging to Nassau County. The refunds represent money that was paid as real estate taxes by residential and commercial property owners. The refunds are monies that were determined by the courts or by hearing officers to be overpayments by Nassau County taxpayers. The refunds are very different from the money that the county has to come up with to settle a liability pothole case or the millions paid for wrongful death claims.

There is no rational excuse for holding on to these real estate tax refunds. As the Supreme Court reminded our republic generations ago, 'justice delayed is justice denied.'

Refunding tens of millions of dollars for real estate taxes overpaid is not a new phenomenon. This has been a growing problem in Nassau County for over 50 years. The overvaluation of properties is not specific to Nassau, but having the county pay the school tax refunds as well as the general taxes is an added burden on the county.

New York state recognizes Nassau’s economic situation and caused the Nassau Interim Finance Authority to step forward to help. But politics has prevented the county from accepting NIFA’s money.

Where is the help for taxpayers who were charged excessive taxes and are entitled to get some of their own money back?

The latest effort by Mangano to manage our county’s cash flow would sell the tax refund judgments to a private investor at literally twice the interest rate that NIFA would sell bonds to cover the bill. Nice work if you can get it.

The underlying issue is the loggerheads that exist between NIFA and the Mangano administration. Philosophical, personal and accountability issues all distort the ability to create a consensus. Mangano refuses to hike taxes, and NIFA views that refusal as an abdication of tough-love leadership.

It has created an untenable situation for the property taxpayer and makes a full-blown fiscal crisis appear much closer to all concerned.

A closed-door summit among NIFA, a representative from the governor’s office, the county executive and presiding officer of the Legislature needs to be convened so that the taxpayers get the money they are owed fair and square.