Nassau tackles expensive assessment mess – By George J. Marlin
The following appears in the May 7-13 issue of the Long Island Business News:
During the eight years Tom Suozzi served as Nassau county executive, very little headway was made in dealing with the 800-pound assessment beast hovering over the county, despite plenty of talk and numerous press releases.
In fact, the annual amount borne by taxpayers from assessment screw-ups grew from $67 million in 2006 to $117 million in 2009, an annual 18 percent growth rate.
In Suozzi’s last year in office, 2009, the county borrowed more than $65 million to settle these cases, burdening future generations of taxpayers with the cost of today’s certiorari errors.
As a result of the failure to come to grips with the problem, half of Nassau’s $2.4 billion in total long-term debt was incurred to settle tax certiorari cases. That amount, about $1.13 billion, was not spent to build a road, rehab a building or improve a park, but merely shuffled from one property owner to another, with lawyers grabbing their customary third.
And it costs county taxpayers $150 million in principal and interest each year to service the debt incurred to settle these cases.
Now, however, Nassau’s new county executive, Ed Mangano, who campaigned on fixing the broken assessment system, apparently means to take on the beast.
In his first weeks in office, Mangano demonstrated he intends to govern by managing the county like the small business owner he was rather than ruling by press release. He repealed the energy tax – saving county taxpayers $40 million a year – created an assessment task force consisting of residential and commercial property owners and leading lawyers in the field to help develop a lasting fix, and lowered the interest rate paid on commercial property certiorari claims that will save the county $1 million a year.
In April, Mangano took the bold step of moving the county from the failed system of annual assessment, which has enriched assessors and nearly bankrupted the county, to a quadrennial assessment approach. This move, plus his executive order that requires commercial property challengers to submit certified appraisals by October 1 or face a $5,000 fine, could save taxpayers up to $50 million next year and as much as $300 million over four years.
By attacking assessment fatigue and allowing the stressed county assessment apparatus the time to be repaired, Mangano will save administrative costs and join Nassau to the two-thirds of taxing jurisdictions in the state that already tax on a periodic system.
Significantly, unlike his predecessors, Mangano has focused on the source of the problem – the commercial real estate assessment mess – that accounts for fully 80 percent of the annual liability. Mangano has said he has zeroed in on the commercial side because, quoting Willie Sutton, the famous bank robber from an earlier era, that’s where the money is.
In his March state of the county address, Mangano revealed that the county’s finances are deeply troubled. Taking on assessment is the first step in attacking a 2011 deficit that could reach $300 million. If he can begin to reduce the burden on county taxpayers from the assessment mess, there is hope that he can take on the public employee unions and others that rely on the county’s largesse.
Mangano faces a challenge in convincing those special interests that the game is over and that the choice is making a deal with the rookie county executive or dealing with a state takeover.
The beast killer Mangano may look like the lesser of two governing evils.