The New York Times

Nassau Overhauls Its Tax System, and Braces for Owners' Appeals


[Editor's Note. You might also be interested in reading our own "Nassau County Reassessment: What does it mean to you?"]

GARDEN CITY, N.Y., Dec. 30 — Nassau County officials approved a new tax roll today, overhauling the county's antiquated property tax system for the first time in 64 years.

But the Nassau Board of Assessors approved the tax roll by a narrow 3-to-2 vote, reflecting wariness about the new system. And county officials braced for a flurry of tax grievances starting Thursday, when property owners will have the opportunity to dispute the assessed values of their homes and businesses, some of which are bound to be higher than in years past.

Most officials here say the new system is a significant improvement over the old one, which calculated property taxes based not on market value, but on a bizarre hodgepodge of 1964 land values and 1938 construction costs. The reassessment was mandated by a court-ordered settlement of a 1997 lawsuit charging that the old system put an unfair burden on homeowners in black and Hispanic neighborhoods. County Executive Thomas R. Suozzi has pinned hopes on the reassessment as a way to staunch a flood of tax grievances that have cost Nassau more than $1 billion in tax refunds in the past decade while helping nudge the county to the brink of bankruptcy.

Still, some officials are critical of the new tax roll, saying it undervalues waterfront homes and mansions and does not sufficiently account for the distinction between similar homes in nearby but otherwise distinct neighborhoods.

And even those who see the shortcomings of the new tax roll as wrinkles to be ironed out over time, rather than serious problems, predict an even greater onslaught of tax grievances in 2003 than in past years, if only because the system is new.

"Many people's taxes will be going up, and I think there is a large concern that the system was flawed," said Harvey B. Levinson, special assistant for tax assessment to Mr. Suozzi. "There are a lot of very angry people out there, so that's why I think a lot of people are going to be filing."

This year, about 57,000 homeowners and 20,000 owners of commercial property filed tax grievances. Next year, that number is expected to jump to 100,000, Mr. Levinson said.

The filing of tax grievances has become something of a ritual in Nassau County, spawning a cottage industry of lawyers focused on winning tax refunds for clients.

Charles J. O'Shea, chairman of the County Board of Assessors, which oversaw the 2 1/2-year reassessment process, said he also expected a spike in tax grievances starting Thursday.

"I think a lot of people are going to want to kick the tires," said Mr. O'Shea, who voted to approve the tax roll today. "They're going to want to see if this thing holds up."

And it will, he said. In places where properties have been overvalued in the reassessment, "we'll make it that much more accurate in the future," he said.

Given how long it has been since all of Nassau's 416,000 properties have been revalued, no one disputes the magnitude of the endeavor, which was completed by the Cole Layer Trumble Company of Dayton, Ohio, and cost $34 million.

Businesses in the county were reassessed in 1986, but that process seemed to create more problems than it solved, in part because properties were assessed during a peak in the commercial real estate market.

Leon Friedman, a professor of constitutional law at Hofstra University who worked on the 1997 homeowners' lawsuit on behalf of the New York Civil Liberties Union, said that whatever difficulties plague the new tax roll were dwarfed by the systemic problems of the old system.

"It's new and therefore we're going to have a period of adjustment, but I still think, `Three cheers for the new system,' " he said.

The new assessments will not show up on tax bills until October, when they will be used to calculate school taxes. County and town tax bills will not reflect the changes until January 2004.

Those who believe their homes or businesses were overvalued in the reassessment process can appeal to the Assessment Review Commission, a nine-member county panel charged with evaluating grievance claims.

But some critics of the new tax roll are more concerned about properties that have been undervalued. One can hardly expect the owner of a waterside mansion to come forward asking officials to raise his assessment.

This problem was partially addressed this month by Justice F. Dana Winslow of State Supreme Court, who has been overseeing the reassessment under the consent decree to settle the homeowners' lawsuit. One new requirement that Justice Winslow imposed, with an eye toward perfecting assessments during yearly updates, was that starting in 2004, a home's resale price would be the minimum amount set for its assessment.

Jeffrey B. Gold, a member of the Board of Assessors who voted against the new tax roll, cited "rampant underassessment," saying the new system would "improperly place a disparate impact on the backs of those hundreds of thousands of county residents that own nonluxury homes, co-ops and condos, and on the backs of small-business owners."

Mr. O'Shea has stressed that the kinks in the system will be ironed out. His critics charge that with a $34 million project aimed at correcting what has become a $1 billion problem for Nassau County, there should not have been so many kinks in the first place.

"I think in the long run, a very unfair and inequitable system has been made a little better," said David Denenberg, a Nassau County legislator who has raised the question of undervalued waterfront property. "It could have been made a lot better."

Copyright 2002 © The New York Times Company.  Presented in the public interest by NY Property Tax Reduction.

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