A Nassau County law that aimed to shift liability for tax refunds from the county to municipal entities has been struck down by a Brooklyn appeals panel that viewed the legislation as "indisputabl[y]" inconsistent with state law. Under 1948 state law amendments known as the "County Guaranty," Nassau was deemed liable for all real property tax refunds on erroneous real property tax assessments. In 2010, the county legislature passed a law that aimed to repeal the guaranty and make the various municipal entities liable for the refunds.
Taxpayers, 41 of the county’s 54 school districts along with the Town of North Hempstead and a number of its special districts, sued the county in three separate actions seeking to void the law. In January 2012, Supreme Court Justice Thomas Adams (See Profile) issued one decision for the three suits, holding the county was authorized to adopt the law.
But a unanimous Appellate Division, Second Department panel, reversed yesterday and held that the law violated provisions of the state constitution and Municipal Home Rule Law. The county argued its charter gave it power to adopt the law repealing the guaranty. But in Baldwin Union Free School District v. County of Nassau, 2012-01468, Justice Plummer Lott (See Profile) wrote for the panel that charter provisions "do not provide the County with the authority to enact local laws relating to the levy, collection, and administration of local taxes that are inconsistent with State laws."
Attorneys representing the school districts and town praised the decision, saying millions of dollars hung in the balance for their clients. Nassau County Attorney John Ciampoli said his office is reviewing the ruling "with a mind towards seeking leave to appeal." Justices Peter Skelos (See Profile), John Leventhal (See Profile) and Cheryl Chambers (See Profile) joined the panel, which heard arguments on Sept. 10, 2012.