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COUNTY’S BACKLOG OF PROPERTY TAX REFUNDS
REDUCED TO $131 MILLION, A 20-YEAR LOW

Weitzman Report Confirms Liability for Refunds is $100 Million Below Target;
As a Result, County Now Ready to Pay Tax Refunds Without Need to Borrow

Date: March 30, 2006

In another sign of Nassau County’s renewed fiscal health, the county’s estimated backlog of property tax refunds has been trimmed to $131 million as of year-end 2005, the lowest level since 1985, according to a report issued today by Nassau County Comptroller Howard Weitzman.  The dramatic reduction in the backlog, down from 2004’s estimated $310 million backlog, was hailed at a Mineola press conference today by Nassau County Executive Thomas R. Suozzi, Comptroller Weitzman, Nassau County Assessor Harvey Levinson, and the Chairman of the Assessment Review Commission (ARC) Glenn Borin. 

The Comptroller’s analysis confirmed the reduced backlog after examining data from the county’s Assessment Review Commission.  The results have also been reviewed by the county’s external auditor, Deloitte & Touche.

“This is additional, important confirmation that our stewardship of the county’s finances has produced real results for the taxpayers of Nassau County,” said Nassau County Executive Tom Suozzi. “We’re pleased that the Comptroller’s office and a major independent accounting firm are verifying that we have significantly and drastically reduced the property tax refund backlog – an issue that very nearly put the county into bankruptcy.  The reduction in the backlog means that the county’s finances are more secure and is proof that taxpayers are getting adjustments they deserve to their property tax bills sooner.”

Comptroller Weitzman said, “Our audit has found that Nassau County has finally reduced its mountain of real estate tax refund claims to a reasonable level.  As a result, the county will be able to stop borrowing every year to pay real estate tax refunds, a major cause of its fiscal crisis.  By achieving the ability to ‘pay as we go’ for refunds, the county has weaned itself from a bad debt habit that was draining it of hundreds of millions of dollars – funds that we desperately need to provide the services that county residents expect and to keep county tax rates from going up. 

“In 2004,” Weitzman said, “I estimated that in order to be able to afford to pay an estimated $50 million in annual refunds out of the operating budget on a pay-as-you-go basis, the county would have to reduce the refund backlog to no more than $231 million by
December 31, 2005.  Remarkably, we have exceeded that goal by $100 million – a stunning achievement that speaks volumes about Nassau County’s return to responsible financial management.” 

Reducing the county’s liability for real estate tax refunds has been a cornerstone of the county’s plans for fiscal recovery since 2002.  In the 1990s, the county regularly borrowed in excess of $100 million per year just to pay refunds to residential and commercial property owners who had filed successful grievances.  The resulting debt totaled more than $1.8 billion and was a key contributor to the county’s near-bankruptcy in 1999.  Under the NIFA Act, the county was required to effectively end this practice by 2006. 

Assessor Harvey Levinson said, “Thanks to the leadership of County Executive Tom Suozzi, NIFA, and under the watchful eye of Comptroller Howard Weitzman, Nassau County has made tremendous strides improving its financial standings by effectively reducing the tax liability debt that accumulated in the 1990s.”

The county paid out $250 million in refunds and adjustments to taxpayers in 2005, accounting for the majority of the decrease in liability.  That amount includes $54 million in “refunds without settlement” under a county initiative to reduce the backlog by placing reasonable estimates of amounts owed into an escrow account. 

Another key factor in reducing the overall backlog was the reduction in new refund liability, from $123 million in 2004 to $53 million in 2005.  Contributing to the decline in new refund liability is that, starting in the 2005/06 tax year, the Assessment Review Commission had a full year to review tax grievances and make reductions before the final assessment roll was established.  The extra time allowed ARC to make more reductions without creating refund liability for the county.  Other factors contributing to the decline in new liability were:

  • the accuracy of assessments, which, according to ARC, has improved with the second revaluation, reflected in the 2005/06 tax year, and which resulted in lower refund liability; and
  • a new five-year phase-in period for increases in commercial properties’ assessed value, which translates into smaller refunds in the event a refund is due.
The full Comptroller’s report on the county’s property tax refund liability may be read by clicking on the link below.

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PDF File County Property Tax Refund Liability (.pdf)

Reduction In Nassau County Property Tax Refund Backlog (1994-2005)

Reduction in Property Tax Refund Backlog