Legislator Howard Kopel, Presiding Officer Norma Gonsalves and County Executive Edward Mangano today called on the New York State Legislature to pass a pilot program to establish an escrow fund for commercial property tax challenges. On Monday, the Nassau County Legislature is expected to pass a home rule message in support of state legislation sponsored by Senator Kemp Hannon (S.7705) to permit Nassau County to establish a Disputed Assessment Fund with respect to commercial property tax challenges. This escrow-type fund, in conjunction with the residential settlement program, will end Nassau County’s need to borrow to pay property tax refunds.
This legislation, originally crafted by Legislator Kopel, “will end the need for Nassau County to borrow money to pay back tax grievance refund debt, which accrues millions annually,” said Legislator Kopel. The State Senate has already filed a bill for this legislation, and all that is needed is a similar bill to be filed for consideration in the State Assembly. Legislator Kopel and the other county legislators plan to pass the county version of the bill on Monday, June 16th.
Historically, Nassau County has paid out approximately $80 million annually in commercial property tax refunds and has borrowed approximately $1 billion over the last 10 years to pay mostly commercial refunds. This legislation provides the County with the ability to set aside dedicated funds in escrow until the owner’s dispute is settled or adjudicated. This bill, in conjunction with the present residential settlement program, accomplishes the following:
Establishes a Disputed Assessment Fund to pay commercial refunds on a pay-go basis.
Eliminates the need for Nassau County to borrow to pay refunds.
Will distribute funds from unsuccessful challenges in whole or part to municipalities, such as school districts.
Encouragesall commercial property owners who dispute their assessments to present their evidence during the 15-month grievance period, which will allow the Assessment Review Commission to adjust their assessed value prior to the final tax roll being set - thereby eliminating the need for them to pay into the fund.
Functionally, each year the final tax roll will be lowered by the approximate historical average error rate (based on each individual property owner’s claim as determined by the Assessor) with all municipalities receiving their entire tax levy. Commercial property owners will receive a separate escrow invoice which will be held in the Disputed Assessment Fund until settlement or adjudication.
Ensures that the burden of commercial refunds is placed on commercial property owners. Currently, all property owners are responsible for paying tax refunds. This creates an inequity between residential and commercial property owners because commercial property owners generate a vast majority of the refunds.
“It has taken a long time for us to perfect this legislation, and I believe this is the best way to finally reform Nassau’s assessment system,” said Legislator Kopel. “I urge Albany to prioritize this item on both the Senate’s and the Assembly’s agendas before the end of their session next week.”