New lawsuit: Nassau reassessment phase-in illegal (UPDATED)

                                                                           

A state Supreme Court justice has ordered Nassau to explain by Sept. 18 why he should not temporarily stop County Executive Laura Curran from collecting property taxes under a planned five-year phase-in of residential reassessments.

That's cutting it pretty close: School tax bills in Nassau -- the first property tax bills using new values developed during the 2018 countywide reassessment-- are payable Oct.1. (Correction. Payable date has been moved to Nov. 1 by governor's order. See below)


Justice James McCormack issued the show-cause order in response to a Massapequa homeowner's lawsuit contending the phase-in is "arbitrary, irrational, capricious and intentional discriminatory" and results in unequal treatment of similar properties.

The phase-in was adopted by the county legislature in March at Curran's urging. It increases assessments over five years for homeowners who were under-assessed while decreasing values for homeowners over-assessed.


McCormack received the case last week after two other Nassau Supreme Court justices recused themselves from the lawsuit filed in July by Sean McCarthy, who is representing himself in court.

McCormack's order was entered Friday just as trial was to begin Monday on another lawsuit challenging the legality of 2018 reassessment.

Sands Point homeowner Eric Berliner and three other Nassau homeowners filed suit against Nassau last year, contending the overall reassessment was arbitrary, secretive and violated constitutional guarantees of equal protection.

Nassau Supreme Court Justice Stephen Bucaria approved class action status for the lawsuit and had scheduled trial to begin Aug. 31.

But Berliner said today the trial will not start as planned while Bucaria considers various motions.
He said no immediate settlement is expected. No new date is scheduled.

It could be the county is waiting out both lawsuits. 

Justice John Galasso signed a first order for the county to show cause by Aug. 20 on the McCarthy case, but the deadline was extended.


If no decisions are reached until after school bills go out using the new reassessment numbers and based on the phase-in, the county may argue the legal challenges are moot.

In his lawsuit, McCarthy said he bought his newly built home in late Dec. 2017.

After the reassessment, the county first estimated in its 2018 tax impact notice that his total taxes on his house, which had a market value of  $816,000,  would be $17,829 without the phase in; $15,423 with it, according to the legal papers.

Then the county told him in his 2019 tax impact notice that his total taxes on his house, which then had a market value of  $806,000, would be $36,124 without the phase-in and $22,535 with it, the  lawsuit says.

It's complicated but McCarthy argues that Nassau assesses new construction differently than existing homes despite state law that requires similarly situated properties to be valued similarly -- a problem that also cropped up after the 2003 countywide reassessment.


Remember, although former County Executive Ed Mangano "froze" property tax assessments from 2011 on, the freeze did not apply to new construction or additions.

So new construction was assessed, and consequently taxed, over eight years based on a rising market, while about 40 percent of Nassau homeowner's assessments remained the same and 60 percent actually decreased because of mass settlements of tax protests by the Mangano administration.


Reports show the mass settlement program increased the tax burden on homeowners who did not protest their frozen values. Imagine its effect on new construction.

McCarthy contends the county is discriminating between properties "based on their prior status as under-assessed or over-assessed."

His lawsuit argues, "There is no rational basis that properties that have been admitted by the county to have been over-assessed and overpaying should continue to overpay their fair share of the tax burden in violation of their constitutional rights for the next half decade while those properties that have been admitted by the county to have been under-assessed and underpaying should continue to underpay their fair share of the tax burden."

The disparate treatment "is arbitrary, irrational capricious and individually discriminatory because it is soley based on the property's prior status as under-assessed or over-assessed and not based on the fair market values of the property," the lawsuit says.

In addition, McCarthy argues, the 2018 reassessment and the phase-in violates equal protection guarantees "because it immediately reassesses only 'new construction' homes at fair market value while phasing in all other residential properties over five years."

His lawsuit asks for a preliminary and permanent injunction and stay of the county's efforts to levy and collect taxes under the phase-in.  He wants the judge to declare the phase-in violates federal and state guarantees of equal protection and due process.

Most of all, he wants his house to be assessed in the same way his neighbors are assessed.


Galasso and then Supreme Court Justice Sharon Gianelli recused themselves from the case.


State law currently does not require judges to explain their reasons for recusal.

Galasso, however, is retiring at the end of this year and appears to be paring his case load.

Gianelli was counsel to the Democratic majority when the party controlled the county legislature under former Democratic County Executive Tom Suozzi. Her husband, Art Gianelli, was Suozzi's deputy county executive for budget and finance when the 2003 reassessment was being implemented.

Justice Gianelli said, through court spokesman Dan Bagnuola, that she recused herself to avoid the appearance of impropriety because of her past position as counsel to the legislative majority.

As usual, the county declined comment on pending litigation. 

UPDATE: The school tax bills in Nassau are now payable Nov. 1. Governor Andrew Cuomo, a Democrat, issued an executive order Aug. 5, changing the deadlines for school tax bills in an effort to help Curran resolve challenges to her reassessment before taxes are due.

Interestingly, the changed dates makes it likely that the bills-- the first based on the new reassessment values--will be sent after Election Day, Nov. 3.

Hmmm. Already there have been whispers that Long Island Democrats are worried about this election which includes races for U.S. president, state senate and state assembly. 

Polls reportedly indicate that bail reform and growing violence are weighing against Democrats. School bills that likely shows increased property taxes also would hurt local incumbents' prospects.

The new schedule:
 

• Originally, the county assessor was supposed to complete the tax roll for school district taxes by Sept. 18; That date is now Oct. 16. 

• Likewise, the county legislature was to approve the tax warrant (used by town receiver of taxes to calculate school tax bills) by Sept. 18, but now must approve by Oct. 16.

• The county was to deliver the warrants and tax rolls to the town receivers by Sept. 28. The new deadline is now Oct. 26.

• The first half school tax bills now is payable Nov. 1 rather than Oct. 1

• The deadline by which the first half 2020-2021 school district taxes may be paid without interest or penalties has been moved from November 10, 2020 to December 10, 2020.

Traditionally, the county assessor doesn't deliver the warrants until Sept. 30, making it nearly impossible to print and mail tax bills by Oct. 1. Generally the school tax bills are mailed a week to ten days after Oct. 1, though the bills are usually online at the tax receivers' website by the deadline.

If the same week to 10 day delay occurs this year, the mailed school tax bills won't be received until after the Nov. 3 election.