How Long Island’s property tax got this way

Nassau passed a local law in 2010 to shift refund costs to school districts, towns and special districts. North Hempstead, dozens of school districts and other districts sued, and in 2014 New York’s highest court declared the law “unconstitutional, invalid, unenforceable and void.” The county still pays the refunds.

Governor Cuomo signed the property tax cap, starting in 2012: levy growth limited to 2 percent or inflation, whichever is less. A school district can go over it with 60 percent of the vote.

County Executive Ed Mangano announced that bills starting in 2012 would assess owners at their lowest estimated level, to stop refunds that were costing the county more than $250 million a year. Nassau’s values then stayed largely frozen until the reassessment of 2019.

About 368,000 Nassau homes were revalued at market value, effective January 1, 2003. The reassessment cost about $34 million.

A lawsuit filed in 1997, Coleman v. O’Shea, said Nassau’s home assessments were racially discriminatory. Under a settlement approved in March 2000, the county agreed to reassess its homes. That June 23, the state created the Nassau Interim Finance Authority to oversee the county’s finances; a recovery plan prepared for the county that year cited a backlog of property tax claims estimated at $400 million.

The former Camp Upton, now Brookhaven National Laboratory, is federal land and pays no property tax. Since an August 1999 agreement with the Town of Brookhaven, the lab has made payments in lieu of taxes on land that used to be taxable: $1.263 million in 2011–12, including $660,422 to South Manor schools and $243,608 to Longwood schools, and more than $13.8 million in all by 2013.

The School Tax Relief program, enacted in 1997, was phased in starting with 1998–99 school taxes. It exempted part of a home’s value from school taxes, with a larger exemption for lower-income seniors, later called Enhanced STAR.

Chapter 1057 of the Laws of 1981 repealed the full-value requirement. It created a class system for “special assessing units,” New York City and Nassau County: homes of one to three families in Class 1, other residential in Class 2, utilities in Class 3 and everything else in Class 4. Class 1 assessment increases were capped at 6 percent a year and 20 percent over five years.

LILCO began building the Shoreham nuclear plant in 1973. It never ran commercially, but it was taxed. In 1991–92 its tax bill was about $82 million, and LILCO’s taxes gave the Shoreham-Wading River school district about $28 million, around 90 percent of its locally raised revenue. Under a 1989 settlement, the Long Island Power Authority bought the plant for $1 and took title on February 29, 1992.

At the county’s request, the Legislature made Nassau County pay every refund from a wrong assessment, including the school district’s and town’s share, in exchange for keeping tax-lien and penalty revenue. By 2003 the county comptroller put the cost at $100 million to $150 million a year in court judgments and more than $1.6 billion in borrowing.

Three hundred families moved into “Island Trees,” soon renamed Levittown. The local school district went from 23 children in 1947 to 5,852 in 1963. Growth like that across the Island is a big part of why school taxes became most of a Long Island bill.

Nassau assessed homes at what they would have cost to build in 1938, less depreciation, with land values last updated in 1954 and 1964. The county went more than 60 years without reassessing homes, a history the state’s highest court recounted in 2007.

Left out when western Queens joined Greater New York in 1898, the towns of Hempstead, North Hempstead and Oyster Bay pushed for a county of their own. Governor Frank Black signed the law on April 27, 1898, and Nassau County came into existence on New Year’s Day 1899. In time it would set the assessments for every town and school district inside it.