Superintendents and personnel from almost every one of the 54 school districts across Nassau County flooded the Legislative chamber Monday morning in a show of force against a proposal to eliminate the "County guarantee" in what is seen as a shift of the tax burden from the County to the schools and has the potential to raise property taxes for residents.
Much of the controversy stems from the "Return Nassau County to a Level Playing Field Act of 2010," or as Deputy County Executive Patrick Foye termed, the "Common Sense Act of 2010." Foye described the bill as a means to put Nassau on "the same level paying field as literally 99.9-percent of the rest of America."
The County Guarantee Reform Act would require schools, villages, towns and other local municipalities to pay their share of tax certiorari refunds for false assessments. The proposed law would not go into effect until 2013.
"If you care most importantly about controlling taxes, the single most important thing that the County can do is eliminate the County guarantee," Foye said. "The current system is inequitable, it leads to certain districts subsidizing others."
Approximately $1.5 billion has been bonded to pay for outstanding for tax settlements, the bulk of which Foye said was incurred over the last 10 years. The new legislation would lower county liability by $20 - $30 million annually according to Foye's figures.
Many were concerned that the legislation will simply shift the tax burden onto local municipalities, who will in turn have to raise taxes to pay for the mandate. "They're going to get an expense in their budget every year," Legislator JudyJacobs, D- Woodbury, said. "That expense must be paid for. That expense will create a hole in the school district budget. We're not talking about saving any taxpayer money, we're talking about taking it from point A and putting it onto point B."
"County tax payers who are also school taxpayers, are already paying this liability," Foye said. "We're not shifting." Foye suggested local governments should be taking "a sharp pencil" to their expenses and should seek additional state aid to help defray costs.
"The County pays out the entire allotment of tax refunds, now we're going to say the school districts, the towns, the other municipalities are going to pay out $80 million of their share," Legislator Kevan Abrahams, D-Hempstead said. "The average taxpayer is going to see, probably a shift because the other municipalities, unless you talk to them, are going to have to raise taxes in order to cover the tax refunds if the problem is not fixed. Wouldn't it make more sense to fix the problem?"
Foye said it made more sense to do both simultaneously. "The $1.5 billion in debt that the County has inferred that the taxpayers pay every week, month and year... speaks to the fact that kicking the can down the road and not taking a reform step today, won't work," he said. "Beginning in 2013... there will be no increase in County taxes or overall taxes for any taxpayer as a result of that action."
Presiding Officer Peter Schmitt, R-Massapequa, questioned Foye where a school district would get the additional funds if a commercial entity which would no longer be contributing $1 million to a school district following a false assessment which was adjusted. "If the XYZ school district needs $1,000 to run the school district for 2011 there will be an equitable adjustment in the tax levy as there is today with respect to commercial and residential properties in any school district," Foye said.
Legislator David Denenberg, D-Merrick, questioned Foye as to another source of revenue the districts have besides the taxpayers. Foye mentioned requesting additional state aid, drawing an uproar from the crowd, and having districts "reduce costs to take as much inefficiencies... out of their system" and to "partner with the County and to go to Albany and to ask for comprehensive assessment reform."
The assessment systems in both Suffolk and Westchester counties are pay-as-you-go, and the actual assessment is conducted by the various towns. "The towns in Suffolk put a tax line the following year to pay back for the refunds called tax cert levy," Denenberg said, dubbing it a "tax cert levy."
"They take responsibility themselves and they say 'we need to pay as we go so we need to pay back for these refunds and we take the responsibility for the taxpayers instead of passing it along'."
The Legislature did not vote on the measure.