Nassau real estate fee remains, despite appeals court ruling

The Nassau County Legislature on Monday voted to reduce a major revenue-generating fee to verify a property's section block and lot, days after a state appellate court sided with a lower court that struck it down.

In March 2020, Nassau State Supreme Court Justice Jeffrey Brown wrote that the $355 tax map verification fee was an "unlawful and unconstitutional tax" on Nassau County deed filers. 

Last week, a four-justice panel of the state's Supreme Court's Appellate Division, Second Judicial Department unanimously affirmed the lower court's ruling, writing: "The fees imposed ... were excessive and improper, as they were exacted for general revenue purposes and not tied to the county’s obligation to maintain its property registry."

The county "failed to raise a triable issue of fact" in its appeal, the justices wrote.

Nassau County Executive Bruce Blakeman, a Republican, filed an emergency order asking the legislature to reduce the fee at Monday's meeting to $270.

The measure passed the Republican-controlled legislature after heated debate, and along party lines, 11 to 7.

Democrats pushed unsuccessfully to kill the fee.

The reduction will lead to a $15 million budget hole this year, Nassau budget director Andrew Persich told legislators.

The fee serves as a significant, recurring source of revenue for the county's nearly $4 billion annual budget. Nassau has been collecting it since the initial ruling three years ago.

The county budgeted $45 million in the fees for 2023.

The latest court ruling does not address whether Nassau must make refunds. 

Blakeman, in a statement Monday, said the "litigation has been resolved," and defended the decision to cut the fee. 

Blakeman said the new one "is roughly equivalent to other filing fees including [State] Supreme Court filing fees. The loss of revenue to the county will be made up by a combination of cost reductions and new revenue through economic development.”

Jason Giaimo, an attorney with the Manhattan law firm McLaughlin Stern LLP, who filed a lawsuit over the fee in 2017, said Nassau cannot unilaterally reduce it to comply with the ruling.

"They would have to conduct some sort of survey or study or analysis as to the cost of the fee they're going to charge, as compared with the service to the residents of the county," Giaimo said.

Persich said he justified the revised fee by dividing the total cost to run the assessment department and the Assessment Review Commission — roughly $24 million — by the average number of real estate transactions that require the certification, which is around 85,000.

The calculation, which included other adjustments, produced a "much more defensible" figure, he said. 

Legislators questioned his methodology.

Nassau Legis. Howard Kopel (R-Lawrence) said he was "skeptical that the cost of this additional service or additional step can be possibly justified as the incremental cost of processing each file."

The plaintiff in the lawsuit, Jeffrey Falk, of Jericho, challenged the fees after purchasing a home in 2016.

Falk alleged they were "excessive and not reasonably necessary to accomplish the county's responsibility to maintain the county’s property registry."

A similar fee in Suffolk is $200, and it also has faced a legal challenge.

Nassau's fee was enacted during the administration of former County Executive Edward Mangano, and rose substantially as his administration struggled with persistent operating losses.

It began as a $50 fee imposed by the legislature in 2012.

It later rose to $75, then to $225 in Mangano's 2016 budget. The legislature raised it to $355 in the 2017 budget.

Nassau collected $57 million from the fee in 2021 as the real estate market spiked. It collected $38.4 million last year.

In a review of the county's budget last year, the Nassau Interim Finance Authority, the state board that controls the county's finances, wrote: "There is a substantial risk to collecting this budgeted revenue."

 Legislators have been on opposing sides of the fee issue in the past.

In October 2021, when Democrat Laura Curran was county executive, majority Republicans on the legislature voted to eliminate the $355 fee. Democratic members abstained from the vote, and Curran vetoed the Republican proposal, which also eliminated or cut other fees.  

By Scott Eidler

scott.eidler@newsday.com@ScottEidler

Scott Eidler is a deputy editor for the towns department at Newsday. Scott has worked at Newsday since 2012 and previously covered municipal government and education.