Appellate Court Denies Nassau Repeal of County Tax Guarantee

Editor's Note: This article was written by Geoffrey Walter.

The New York State Appellate Division Court has overturned a Supreme Court ruling which would have passed a portion of Nassau County’s property tax settlements onto local municipalities, including school districts.

The unanimous decision handed down by the four judges declared that Nassau’s attempt at repealing its county guarantee was unconstitutional based on the fact that a special state law created the measure in 1948 and another such special measure would have to be adopted by the state in order to repeal.

“Since the guarantee was added to the county administrative code by a special state law, it can’t be repealed by the county,” Nassau County Attorney John Ciampoli said Wednesday.

“However, the case law is really clear on pointing the other way that a local law can supersede a special law.”

Under the county guarantee, since Nassau was the assessing unit for all property in the county, it would be held liable for all property tax refunds from false assessments.

“We’re subsidizing them,” Ciampoli said.

Nassau is the only county in New York that offers a guarantee and sits at the heart of the county’s financial debate as it has had to heavily borrow in order to pay for past refunds.
The Nassau Legislature voted in 2010 to adopt a law which repealed the guarantee in which it would continue to act as assessor, but local municipalities such as towns, villages, special districts and school districts would have to pay the refunds.

The move caused school districts to balk and created intense discussions and debate on how to exactly fund property tax refund settlements, mostly through a specially dedicated fund in each district, which ironically could not be set up and funded without state authorization.

A total of 41 school districts led by Baldwin as well as the Town of North Hempstead then sued, saying that the measure violated the state constitution and home rule laws that limit the county’s ability to enact laws dealing with taxation which are inconsistent with state law.

In a Jan. 6, 2012 ruling, the State Supreme Court stated that the county had the right to enact the law as it had argued the powers to amend its administrative code were granted to it by the state constitution and home rule laws.

“When the charter was granted to Nassau County by the state, it included the power to amend the administrative code,” Ciampoli said, adding that the state is not allowing Nassau to undo the measure.

“I think it’s fair to say that this decision, they say ‘you can’t do this,’ but it doesn’t tell you how to do it. Certainly this decision doesn’t say ‘if you did A, B and C instead of A, B and D, you would have gotten it right.’ They just basically said ‘you did it wrong’.”

The Appellate also stated that the law had to be consistent with both state and local laws regarding taxation.

“What’s fundamentally contradictory here is they’re saying that we can’t amend the administrative code of the county to bring it in line with state law, which is the state real property tax law because what we did isn’t in line with state law,” Ciampoli said. “They’re saying you can’t amend your administrative code to conform to state law because what you did doesn’t conform to state law; it’s circular logic.”

Ciampoli said that he had spoken with Executive Ed Mangano and that the county would make an appeal to the New York State Court of Appeals – the highest court in the state – for a final determination.

“We’re going to fight this all the way,” Ciampoli said. “Ultimately I’m confident that our rationale and our arguments will win the day in Albany in the Court of Appeals. I think that the circular logic that underlies this decision is just going to fall by the wayside.”

Read the decision in its entirety here.