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The Carry Forward policy in Nassau County allows property owners to enjoy annual tax reductions continuously.
Nassau’s Assessment Review Commission gives settlement offers to people who appeal against the tax assessment on their houses. Those who repeat the appeal every year get reductions that are automatically carried forward in the group of people who negotiate for reductions each year.
However the gravy train is halted in case the property is to be sold or the owner makes an application for a permit when building or when, in addition to other issues, the property owner misses an appeal.
While the group getting reductions continue moving ahead, the homeowner together with the annual automatic reduction remains behind.
A Sunday report in the Newsday newspaper reviewed Nassau’s Carry Forward policy and declared that it was as discriminatory as the whole assessment system in the county.
Why discriminatory?
In the first place, the normal property owner who got a settlement during the initial year of the assessment system reforms carried out by Edward Mangano (Republican County Executive) in 2010 and then filed successive annual appeals up to 2015 eventually saved 20% of the taxes they could have been required to pay during that period.
In case the homeowner dropped from the Carry Forward group at least one time during that time, the tax reduction came to 17 %.
On the other hand, homeowners who postponed filing their annual appeals after the year 2010 did not enjoy the full benefits that came with the automatic reductions.
But let us assume that all homeowners accepted settlements from the commission from 2010 and that in addition, they wished to make sure that they did not drop from the Carry Forward group.
Was it possible to do that?
According to the report on Newsday, the answer to this question is no because the commission did not publicize the basis for remaining in the group and, equally important, the acts that could lead to the disqualification of a home from the tax assessment policy.
It was therefore not possible for the owner of a house to be aware that simple actions such as selling or listing a property, applying to get a permit when building or missing an assessment appeal would ultimately affect potential reductions.
That is unjust and unfair.
From the time that the assessment overhaul launched by Mangano got underway in 2010, taxes amounting to $1.7 billion have been moved from homeowners who contested their assessment to those individuals who did not. The end result of this has been the creation of two separate and unequal tax systems.
Next January, Laura Curran, a Democrat, will be the new county executive and she will need to craft a solution to the problem. Throughout the campaign, Curran frequently stated she would engage a properly-qualified assessor to take the place of the acting assessor appointed by Mangano.
A proposed change in the Republican plan to redefine the federal tax code is basically impractical to Long Island property owners while enormously affecting their capability to take a property tax deduction. This is what critics and analysts said after a long-awaited proposal was disclosed.
Under the current plan that has the backing of President Donald J Trump, property owners who itemized their returns will no longer be allowed to deduct the amount of money paid in their state income taxes from their federal taxes. They will only be able to deduct the maximum amount of $10,000 in property taxes. According to the latest taxation reviews, this proposal will hurt high-income earners and high taxation states such as New York, especially Nassau and Suffolk Counties.
This proposal has been slightly steered by the GOP. It has not significantly changed from the original draft in regard to local deductions, but there are slight changes. The republican house proposed a plan to cap this at $10,000. According to analysts, the cap will be able to cover property owners in most in the upstate counties, but most experts also said that most of the homeowners would be left out in Suffolk and Nassau counties.
“Any elimination or reduction of these deductions will hurt most Long Islanders and the $10,000 cap is virtually useless to Long Islanders who on average pay more in property taxes and state income taxes than any other region in the country,” said Kevin Law, CEO of the Long Island Association, a pro-business group.
The average amount of Nassau deductions for local and state income taxes is $15.213 with another amounting $12.683 for property tax deductions. This is according to a recent report released by the state comptroller’s office. Suffolk’s deduction is $10,934 and $10,387, consequently. As we have said, this is according to the new Republican plan. Under this plan, the property owner will be unable to deduct income tax payments and will most likely see his/her property tax deductions capped at $10,000. This would basically mean that most Long Islanders would lose deductions of $10,000 or more.
It is important to note that mortgage interest deductions will be maintained but only limited for newly bought homes up to $500,000. The loss of these deductions is estimated to result in an amount of $2 billion dollars annually. According to LIA projections, this will greatly hit Suffolk and Nassau economies. They have confirmed that the rates could drop as much as 10% according to the GOP plan. This is according to State Realtors Association.
“Our initial read of the House tax proposal released today is that it will harm many New York homeowners,” Duncan MacKenzie, head of the realtors’ group, said in a statement. “It will lessen the value of the property tax deduction and it cuts a host of other key housing-related tax incentives.”
The National Home Builders Association that has been offering tremendous support to Republican candidates are opposed to the GOP tax plan in its current plan. Those who back the plan believes and promotes the idea of doubling the standard deductions even though it would be primarily for those living in lower tax states. This includes the South and South West. There is also a very decent provision that aims at eliminating an alternative minimum tax that affects most households that make about $200,000-$1 million dollars per year. This is according to a report released by LIA. They also confirmed that the plan would not offset the loss of deductions.
The effect on property tax and state tax deductions are fundamental reasons why 7 of the 9 Republicans in New York delegation are opposed to the plan.
“I am a ‘No’ to this bill in its current form . . . Adding back in the property tax deduction up to $10,000 is progress, but not enough progress,” Rep. Lee Zeldin (R-Shirley) said.
“They call it a tax-cut plan, excuse me . . . In the state of New York, it’s a tax increase plan,” Gov. Andrew M. Cuomo said, calling the loss of state and local deduction “diabolical.”
Now more than ever, we strongly urge all Nassau and Suffolk homeowners to grieve their property taxes prior to the respective filing deadlines. In Suffolk County this year’s filing deadline is May 21, 2019, Nassau is March 1, 2019.
Long Island’s school spending may increase to an average of 2.35% for the 2017 – 2018 school years, with school increasing by up to 1.73% more compared to the 2017’s current hikes, yet only within state tax-cap restrictions for the large majority of districts.
According to the state Education Department, specifically from the figures, they released last Wednesday, it seems that budgeted spending may increase by about 2.36% in Nassau County and by about 2.33% in Suffolk County.
In Nassau, tax levies are said to increase by 1.37% & by 2.10% in Suffolk. Every year the Education Department colts report from approximately seven hundred districts across the state, including one hundred and twenty-one in the 2-county region.
At this point school budgets are proposals and they’ll be submitted to voters on May 16th. Currently, there’s only a single school district in New Suffolk that announced its intention of overriding the state-imposed tax cap. By law, this means that 60% of the votes need to be in favor of the new budget.
The New Suffolk spending plan will increase its tax levy by six point five percent in 2018, which is almost double the current three-point four percent limit. Proposing such an increase though is not that simple and school officials are still thinking about it. However, in part they do agree to it given the fact there’s been an unforeseen increase in tuition costs.
The district operates just 1 elementary school. When it comes to its older students from grades 7 through twelve, they’re sent on a tuition basis nearby Southold. This year though it seems that 4 new high school age students moved into the county, which is a very large increase for a system of approximately twenty-five students.
On top of that, the county received 2 new students (elementary age) who don’t speak too much English. As such, it’s the district’s duty to pay for language instruction classes so that the new students can learn how to speak proper English. The good news is that there are also plenty of certified teachers who can work with such students and help them integrate better.
For a full year, the total costs amount to about $20,000. When you think about it, this is a very large hit, said the president of the new Suffolk school board, Tony Dill.
In an effort to reduce costs as much as possible, 2 local teachers are currently being certified so they can work with students that do not speak English.
1 district in Suffolk and 5 districts in Nassau are cutting taxes. This includes Valley Stream thirty which currently has the highest project levy minimization: 15.7 % (onetime cut).
According to local school leaders, the cuts will fulfill their promise to make payments made by property owners in lieu of PILOTs (taxes payments) in order to lower the levy for this year and the next. It’s important to mention that their promise only covers the taxes payments that exceeded budgeted removes in 2017.
The administrators of Valley Stream said they wish local homeowners will get some property tax relief thanks to the levy’s decrease, yet they’re not really sure about whether this will be the case due to the various complexities (not under their control) of Nassau’s tax system.
One example of such complexities lies in the fact that there are 4 classes of taxable property in Nassau. Also, the burden associated with each class, regardless of if we’re talking about residential or commercial properties, changes on a yearly basis. Another problem is the fact that the largest PILOT payments are currently made by the Green Acres and they’re presently under fire due to legal disputes.
Because of these issues, the school officials said that they are not sure whether the state will receive the same payments as it did in the past. Furthermore, if there are any solutions to the problem, they’re going to be up to different government entities, such as the Industrial Development Agency, Hempstead Town, and the county.
“Currently, there are many questions asked, but very few answers, said Valley Stream school districts superintendent”, Mr. Nicholas Stirling.
Nassau County Executive Edward Mangano received a warning Last July that in 2017 the popular tax cut which averaged one hundred and sixty-six dollars would no longer be applied.
Even though he was warned about it, Mangano failed to inform about 44 thousand senior citizens who did get the abatement concerning the end of the tax break program. They were completely taken by surprise when they got their general tax bills last month.
The county’s comptroller, including the lawmakers, says that they weren’t informed about the expiration of the abatement.
After many complaints were filed, the state and county lawmakers struggled to extend the abatement by introducing legislation that was enacted back in ’02 to offset a nineteen point three percent increase in county property tax. Homeowners who are at least sixty five years old and make less than eighty-six thousand dollars per annum would qualify for the tax break, which exclusively applied to county taxes.
In an E-mail copy obtained by Newsday, Roseann Dalleva, who is a Budget Director and Lisa LoCurto, who is the Chief Deputy County Attorney for Mangano, stated that they received notification about the abatement’s expiration on July twenty-first, 2016. The E-mail requested guidance for the preparation of the ’17 budget. The E-mail was confirmed by 2 other county sources and said that it came from the assessment department.
On January 19th, a Freedom of Information request was submitted by Newsday, asking for all the E-mails Dalleva and LoCurto exchanged between May and July regarding the abatement. The E-mails were not provided by the Mangano administration, but they did say last week that a reply will be provided to Newsday in approximately thirty days.
One of Mangano’s spokesmen, who are actually involved in a corruption case, said that the County Executive never received information about the expiration of the abatement. He continued to say that the E-mail date referenced is after the completion of the State Legislature’s session last year and it’s too late to impact the situation in 2016. The most important piece of news for the residents though is that the State is addressing the situation.
On Friday, the Democratic Nassau legislator, Laura Curran who is also running for county executive, said that taxpayers are extremely unhappy about county execs who cannot properly run the county. Seniors needed to be informed about this.
The spokeswoman for Presiding Officer Norma Gonsalves, Cristina Brennan, said that the Republican staff and legislators weren’t informed about the expiration of the abatement as well.
Another runner-up for county executive, Comptroller George Maragos, said on Friday that this was all done in secret without notifying the seniors in any way. He continued to say that the whole thing is even more disturbing since the county exec was also not notified about it.
Assemb. Charles Lavine, who plans on running for county exec, said he is truly disappointed of the whole situation and said that the Mangano administration should have at least been forthcoming about this and inform its citizens about the change.
Mangano keeps mum about whether he’ll run again this year
On January the 23rd at the most recent Mangano administration meeting, Curran questioned it when lawmakers voted to request that the state puts an extension on the tax break. Even so, she received no answers.
Was the administration aware at any point during the budgeting process that the abatement will expire? Curran asked.
Former Legis. Fran Becker and Mangano liaison said that the county exec agrees with the abatement’s extension, yet no one was sent yet to talk about this.
This caused Curran to ask whether anyone in the administration knew about this during the budget process. Becker swiftly replied that no one knew about it.
Curran continued to say that since people will vote on this, it’s necessary that we have a good answer. Becker’s reply was to ask Curran to repeat the question.
After he got elected, Edward Mangano’s tax overhaul led to the creation of 2 different property assessment systems that are not only unequal but also separate
The Nassau County Executive’s actions seem to have had a massive impact on the county’s economy.
1 system covers about sixty-one percent of the country’s commercial and residential property owners who went ahead to appeal their assessments in this period. Over the past 7 years, their tax bill went up by 466 dollars or just 5% with basically 4 out of 5 appeals successful.
The second system covers thirty-nine percent of the people that didn’t yet appeal. For these owners, the tax bill went up sevenfold or by almost 36 percent to 2748 dollars.
All of these discoveries have been properly documented in a Newsday series of data studies that currently provides one of the most accurate and comprehensive analyses of the assessment system in the county. These studies are performed with the purpose of exposing hidden difficulties among less affluent residents and senior citizens that usually do not appeal. The studies also shed light on the massive changes in the way tax are distributed within the county between the lower valued and higher valued properties.
Over the past 7 years, the analyses revealed a shift of one point seven billion dollars in taxes from those who appealed their assessments successfully to those that didn’t. It was discovered that 10% of the owners whose appeal was successful had properties of at least one million dollars prior to the reassessment. After it, the reassessment garnered almost 50% of the benefit. What this means is that over seven hundred and ninety million dollars in tax were transferred to lower-valued parcels. As a result, homeowners whose property is worth at least a million dollars are currently paying less in taxes than they did 7 years ago.
The overhaul was very much welcome in an environment where certain people have been paying more taxes than others. This was also due to the fact that in ’97 a suit was filed in this regard, alleging that minority homeowners were paying a lot more taxes than other groups. Functioning under a two thousand court-supervised settlement that requires a great level of assessment accuracy, officials decided to lower the share of less expensive properties and increase taxes on properties worth at least 1 million dollars or more.
After this change, the residential assessments in the county were finally in compliance with all of the widely used professional standards for accuracy and fairness. However, after partnering up with 2 national assessment experts and conducting a residential property data study, Newsday discovered that it is currently non-compliant with all of them.
When county officials were inquired about this, they did not question any of the results. Mangano did go on the defensive, protecting his reforms saying that they can help minimize the costs for the county’s assessment system. He also estimated that thanks to these reforms, the county managed to save between twenty to thirty million dollars a year. He went on to say that every future generation and single taxpayer benefitted from them since they helped the county by not creating debt.
When the county officials had to respond to evidence that stated fewer grievances were filed by less affluent homeowners, they said that they had more than forty workshops per annum with the purpose of explaining the steps homeowners can take to challenge assessments. They even posted a video detailing the process of filing on the internet. This is something which is solely allowed by Nassau County.
The head of the Nassau County grievance arbiter, Robin Laveman, said that the reforms brought by Mangano saved the county a lot of money by replacing a faulty and old system.
Mangano’s purpose was to fix a system that was straining the county budget since many homeowners have already successfully appealed their assessments which resulted in massive refunds.
Thanks to Mangano’s reforms, the county managed to save between one hundred and fifteen million to 299 million dollars, based on different factors, such as the impact of a recently launched program that influences commercial property refunds, and inflation.
First, the solution involved awarding highly discounted reductions on a much greater number of appealed properties than ever. This was done in order to settle cases prior to tax refunds having to be paid in order to save money. Secondly, there was the issue of assessment freezes which resulted in those reductions being locked in from year to year. Over a period of 6 years during which the value of properties went up, seventy-eight percent of the 858 thousand grievances filed resulted in massive reductions, sometimes in double digits.
If we look back in the history of the country, we can notice that it’s generally high-value property owners who file the greatest number of appeals. The effects seem to be apparent in all 3 county property classes which were included in the analyses conducted by Newsday. However, there was a 4th class which was excluded, composed of phone poles and other types of utility properties.
When it comes to the residential class which includes low rise condominium buildings and private homes, the gap between unappealed and appealed properties was even greater. The median tax bill increased by thirty-six percent for unappealed properties, while the appealed properties saw an increase of five percent to 431 dollars.
The median bills are those of regular homeowners, including residential and commercial homeowners, whose burden is in the middle between the smallest and largest bills. In this article, we’re referring to the median bills as the standard ones.
The category including the high-rise condominium buildings and cooperatives, the bills for a standard appealed property rose 4% to 202 dollars compared to sixty percent of 2299 dollars for the unappealed property.
For commercial properties, the gap between the 2 groups was five hundred and eighty-eight dollars. However, this number fails to include the refunds received by properties after battling with courts for years.
Over 6 years, those 1-year disparities will add up. The general tax bill for unappealed property increases was greater than those of appealed properties by eight thousand nine hundred and fifty-nine dollars over that timeframe.
Whether you believe in resolutions or not, making a list of action items can help you achieve your goals in 2017!
Here are some great items to add to your list as you set goals for the new year, and set yourself up for success!
1- Review your business plan.
Now is a great time to think about your real estate business plan. What do you want to achieve this year? Are you looking to increase revenue? What about expanding your team? Think about what you want to accomplish, create an action plan to meet your goals.
2- Start networking.
Expanding your network can go a long way in growing your real estate business. Networking can provide great resources for learning more about related industries. There are countless networking groups on-line and off! LinkedIn is a great place to join groups and Meet Up can direct you to local live networking events.
3- Start blogging.
Blogging is a great way to connect with other agents, businesses and create new leads. It’s a great way to interact with new audiences, and connect you to other professionals who could help generate new business.
4- Personalize your services.
You already know how important it is to set your business apart from the rest. Personalizing your services will help differentiate your services from other agents. Offering suggestions for services such a property tax grievance can help home sales and save buyers money. Personalized closing gifts are another simple way to identify yourself. Pay attention to your client’s likes and dislikes, so you can give them a positive experience.
