If Nassau County Executive Edward Mangano’s move to cut off the county guarantee in 2013 stands up against the wave of criticism it is confronting, it will possibly also have to stand up in court to assert its viability.
School board superintendents universally expressed disdain and apprehension at the prospect of an end to the county guarantee to refund overpaid property taxes because of inaccurate assessments and said they anticipated the Republican initiative will almost certainly be met with a legal challenge.
“If it stays in place, we’ll have to build up a reserve in the budget. We’ll have to deal with it,” said John Bierwirth, superintendent of the Herricks Union Free School District.
But Bierwirth said he anticipated that the attempt to end the guarantee as of 2013 would be challenged in the courts.
“My understanding is that it will be contested in court, so we’ll see what happens,” he said.
Several other superintendents echoed Bierwirth’s expectation that a legal challenge would ensue. An initiative to eliminate the guarantee during the administration of former County Executive Thomas Suozzi was stopped by a state Supreme Court ruling last year.
Lorraine Deller, executive director of the Nassau-Suffolk School Board Association, said that her organization is in communication with attorneys for the 55 respective school board’s it represents. But she said it is too early to say whether collective or individual legal action would ensue to battle the latest attempt to end the guarantee.
“All avenues are being looked at this point,” Deller said. “Now that the next step is being contemplated, it takes time for the school boards to talk to their attorneys to decide how to deal with this.”
Meanwhile, all school district superintendents are anxious about the potential financial fallout if the guarantee is terminated – particularly in light of a statewide property tax cap proposed by the governor-elect Andrew Cuomo, shrinking state education aid and a county sewer tax.
“We have the perfect storm in place,” said Robert Katulak, superintendent for the New Hyde Park-Garden City Park School District. “You have diminishing revenue and increasing expenditures. What they should have done was fix the assessment program first, and then address the school budgets.”
Along with the uncertainty of the ultimate impact the end of the tax guarantee will have on individual districts, there is uncertainty about how to deal with it, as Katulak noted the existence of the guarantee effectively prohibited districts from creating cash reserves to cope with property tax shortfalls.
“We’re going to be looking into all options. Whether we can do that by law, we’re going to be looking at that as well,” said Warren Mierdiercks, superintendent of the Sewanhaka School District.
Mierdiercks estimated that the impact of making up for shortfalls due to tax assessment challenges would cost districts an average of $2 million.
“This is going to be very difficult to put together a budget that’s going to be a 2 percent increase,” Mierdiercks said, acknowledging the need for school districts to minimize budget growth. “It’s not a very good financial picture.”
School districts with sizable commercial tax bases could incur a larger hit since commercial tax appeals are a common source of annual tax shortfalls.
“I’m very worried about it. For Mineola, with its commercial tax base, it mean millions of dollars for us,” said Michael Nagler, Mineola superintendent of schools. “The thing I find most egregious is that county cannot provide a dollar figure for what they supply to the Mineola school district. I don’t how these guys voted.”
Nagler said the Mineola school district would have to find some way to start building a reserve now to avoid a “spike” in its tax levy the year before the guarantee is eliminated.
Thomas Dolan, Great Neck superintendent of schools, also expressed frustration about the lack of any financial guidelines by the county as he criticized the timing of the Republican cost-cutting tactic.
“With the governor’s proposal of a tax cap, it does not make any sense to have a tax cap and for the county giving us new liabilities at this time. The tax cap is a strong determinant upon what the districts can do,” Dolan said.
Dolan said eliminating the guarantee would not represent any cost savings, since taxpayers would still be paying the freight through school taxes.
Lorna Lewis, superintendent of the East Williston School District, estimated that the shortfall would cost her district more than $600,000 annually, which would represent a 1.3 percent increase on its current budget.
“It’s still devastating for us because we’re a small district. This is devastating for districts as we move into the probability of moving into a 2 percent [property] tax cap.”
At last week’s county budget hearings, Mary Jo O’Hagan, vice president of the Nassau-Suffolk School Boards Association, cited a 1976 letter from then Nassau County attorney James Catterson to then Gov. Hugh Carey that stated any departure from the county guarantee “would prove to be an administrative and financial nightmare” for county school districts.
“Perhaps some of you believe that the way out of a budget crisis is to foist your obligations on to other governments,” O’Hagan told the county legislators. “Perhaps some of you believe that you have the authority to do so.”
Evan Nemeroff contributed reporting to this story.