Nassau County, N.Y., is establishing steps to improve its system of residential assessments, which in the past has forced the county to engage in costly borrowing.
For more than a decade, the county, which covers Long Island suburbs just east of New York City, has required homeowners and commercial property owners to pay their property taxes before settling tax grievances under the Small Claims Assessment Review system.
The past failure to settle these disputes before the county issued tax bills meant Nassau had to borrow more than $1.3 billion to pay for tax refunds over the past decade, according to County Executive Edward Mangano. That, he said, has cost taxpayers $250 million annually.
“We inherited an assessment system that was dysfunctional in every way,” said Mangano, who was elected executive in 2009. He said he will coordinate the effort with an administrative review team consisting of Shalom Maidenbaum, Paola Orsini, Bob Orisz and William Wise.
Also this week, Nassau Comptroller George Maragos said audits of the assessment department’s and county attorney’s handling of the process also found a $35 million improvement in 2010 over 2009.
But Maragos also cited “significant operational weaknesses” that need correcting. They included inadequate internal controls that resulted in the county receiving a $1.2 million tax bill for the county executive and legislative building, inconsistency in data collections that compromise fair appraisal, and inadequate documentation of reductions in assessed valuations.
Maragos’ review also found that the new methods used to determine residential values for the 2012-13 tentative roll corrected some “significant past errors,” but inaccuracies still exist as market conditions increased the inequity by shifting valuations to mid-tier properties.
The comptroller found high-end property valuations inconsistent and manual errors commonly causing arbitrary and unexplained reductions or increases in property values.
The county is under the oversight of the Nassau Interim Finance Authority, which imposed fiscal control in January. Three weeks ago, Mangano submitted a $2.6 billion budget for fiscal 2012, which he says would eliminate a $310 million deficit.
For several months the county and NIFA have disputed how best to close the gap. “The county is moving in the wrong direction,” a NIFA report said in July.
Nassau is rated A1 by Moody’s Investors Service, A-plus by Standard & Poor’s and AA-minus by Fitch Ratings.