860 Executive Towers v. Board of Assessors of Nassau County

• Decision Date: 24 July 1975
• Citation: 377 N.Y.S.2d 863,84 Misc.2d 525
• Parties: 860 EXECUTIVE TOWERS et al., Petitioners, v. The BOARD OF ASSESSORS OF the COUNTY OF NASSAU, Respondent.
• Court: New York Supreme Court

Page 863

377 N.Y.S.2d 863

84 Misc.2d 525

860 EXECUTIVE TOWERS et al., Petitioners, v. The BOARD OF ASSESSORS OF the COUNTY OF NASSAU, Respondent.

Supreme Court, Special Term, Nassau County, Part IV.

July 24, 1975.

Koeppel, Sommer, Lesnick & Martone, P.C. by Adolph Koeppel, Bernard Sommer, Michael R. Martone and William D. Siegel, Mineola, for petitioners.

John F. O'Shaughnessy, County Atty. (Leon Friedman, Deputy County Atty., Mineola, of counsel), for respondent.

HOWARD T. HOGAN, Justice.

Under attack in the second phase of this long involved joint trial on the separate issue of ratio for the tax years 1965--66 through 1973--74 is the methodology utilized by the State Board of Equalization and Assessment (SBEA) by which this Board arrives at the state equalization rate for Respondent, Nassau County.

A state equalization rate is defined as:

'The percentage of full value at which taxable real property in a county, city, town or village is assessed as determined by the state board.' RPTL § 102(19)

The state equalization rate serves primarily to apportion the allocation of tax benefits and burdens throughout the tax districts. A state equalization rate seeks to establish a just relationship between the valuations of all the tax districts within the County. Litigation to establish ratio of assessment to full value of all other properties within the tax districts has long been known to be burdensome, costly and unwieldy (Yaras v. Kinnaw, 303 N.Y. 224, 231, 101 N.E.2d 474, 476; Stewart v. Feitner, 53 Misc. 334, 104 N.Y.S. 794). In an inequality case the task is to make a comparison between the rate of assessment of subject property, i.e., the proportion of its assessed value to its full value with the rates of assessment of the selected sample parcels within the tax district. This requires proof of full market value of all selected sample parcels. The purpose of an To date, this litigation has consumed many months. At present there are in excess of 7,000 pages of testimony and some 293 exhibits. In the first phase of this trial the Court heard evidence as to valuation of the 33 selected sample parcels pursuant to RPTL § 720(3). In this, the second phase, among the witnesses were three distinguished university professors well versed in statistics and a recognized real estate appraiser who have analyzed SBEA's techniques and methods in arriving at the state equalization rate for Respondent County.

inequality proceeding is to eliminate discrimination in assessment so that one taxpayer pays no more than his proportionate share of the aggregate tax levied in the district (Wolf v. Town of Hanover, 308 N.Y. 416, 421, 126 N.E.2d 537, 541). Sample parcels should represent a fair cross-section of the tax district and should not be chosen for their similarity to the subject (Hagy v. Lewis, 280 N.Y. 184, 20 N.E.2d 386).

In terms of trial logistics, the preparation by both sides may be the equivalent of Sherman's march through Georgia, but unlike Sherman, counsel left little to chance and almost nothing overlooked. The trial carried with it the impression nothing was to be left undone. During the course of the litigation lasting nearly two years, there have been innumerable motions, orders to show cause, and at least one intermediate appeal.

Respondent, County of Nassau, has a population approximating $1,500,000 with more than 400,000 parcels of real property subject to taxation. Better to understand the complexities of this litigation within Nassau there are 2 cities, 3 towns and 62 incorporated villages. The cities, villages and county have their own assessors; the Towns do not.

The last time Respondent, County of Nassau, had reassessment was nearly 40 years ago (1938) when the late J. Russell Sprague was County Executive. Since then real property values have increased many fold. However, the proportionate increase is real property taxes has far exceeded the rate of increase in actual market values during the past decade. The time has come for a total reassessment. This, perhaps, may remedy some of the inequality found from the evidence in this trial. For example, the range in values as established from the list of sales used by SBEA in the 1968 survey for the Town of Oyster Bay reflect a range in ratio from 8.02% To 142.84% Of true value (SM 5216--5223; Table 5, Petrs'. Ex. 114--A), a rather shocking situation calling for corrective action.

Respondent has but one assessment roll for all villages, towns and cities. This roll is utilized for all special district purposes as well as for schools (County Government Law of Nassau County § 602; County Administrative Code § 6--1.0(4), § 6--7.0 and § 6--17.1).

Nassau and Tompkins Counties are the only two counties in the State of New York having a Board of Assessors. Section 504 of '. . . the office of assessors in towns is abolished . . . and its powers and duties are transferred to the county board of assessors . . .'.

Nassau's Charter, adopted in 1935 (L.1935, ch. 938, repealed by L.1939, ch. 272, now Nassau County Administrative Code, ch. VI) authorized the Board of Assessors to assess all real property subject to taxation within the county for state, county, school and/or special district purposes (County Government Law of Nassau §§ 601, 602). Under § 609 of the same law:

Under the Administrative Code of Respondent there is a tax or assessment district (§ 6--2.0, supra, as provided in RPTL § 102(1)) and pursuant to the County Government Law the Board of Assessors establishes uniform assessment throughout the county. Implicit in the abolition of the office of town assessors and the transfer of the assessment power to the County Board of Assessors is the fact that the County Board of Assessors has succeeded to the powers and duties of the former Town Assessors and has standing to represent the towns to seek review of the state equalization rates for the towns in Nassau where assessments are established by its County Board of Assessors.

Annually, the SBEA sitting in Albany holds hearings at which any aggrieved taxing district may protest those equalization rates which the SBEA is mandated to establish for each county, city, town and village (RPTL §§ 202, 1214).

At these hearings representatives of all taxing districts are given an opportunity to protest--that is, All but Respondent. SBEA interprets RPTL Article 12 to limit protests to taxing districts only and since Respondent is not a taxing district, it has no standing. While Respondent's Board of Assessors have been permitted to appear Informally and submit protests in writing, they have consistently been denied a hearing. Both the present Chairman of the Board and former vicechairman testified they felt 'demeaned' when attempting to voice their protests of the state rate. The lasting feud between Respondent and SBEA in this respect has resulted in total frustration. With almost mechanical regularity, each year representatives of Respondent board seek leave to be heard but are denied.

I find this preclusion by SBEA to be based upon a misinterpretation of Article 12 and failure to recognize Respondent's charter. (See County Government Law of Nassau County, §§ 601, 602, 609). Article 12 requires SBEA as part of its procedure for establishing state equalization rates to sample the ratio of assessments to market value for each major type of taxable real property in all cities, towns and villages and in the case of a city in a county having a county department of assessment, SBEA shall establish a rate for that portion of the county roll within the city. Article 12 must be read in conjunction with County Government Law of Nassau County, supra.

From this it is clear that Respondent's Board of Assessors must assess all real property in the county liable to taxation for state, county, town school and/or special district purposes. Respondent's Board of Assessors represent the taxing district since the town assessors have been abolished. To deny them a hearing is violative of due process.

In passing, it is noted that at the hearings conducted by SBEA, the hearing officer who is called upon to make a judgment as to the validity of state rates frequently is a member of SBEA's staff. This is a highly questionable procedure. In effect it makes SBEA--prosecutor, judge and jury--all in one.

The state rate once determined is the result of an administrative decision (RPTL § 202(1)(b)) not reviewable by the taxpayer but by the taxing district under the limitation of an Article 78 proceeding (RP § 760; Mtr. of O'Brien v. Assessor of the Town of of Marmaroneck, 20 N.Y.2d 587, pp. 596, 597, 285 N.Y.S.2d 843, pp. 849, 850, 232 N.E.2d 844, pp. 848, 849).

Our state rates are the results of processes which are obscure and complex as testified by the three university professors and a recognized real estate appraiser. In the establishment of the state rates the SBEA avails itself of all information it has in its offices from appraisals and sales (RPTL § 1202, subd. 2).

Prior to the amendment of § 720 in 1969, following the O'Brien decision, state equalization rates were not admissible (Yaras v. Kinnaw, supra; Wolf v. Assessors of the Town of Hanover, supra). These cases stand for the proposition that procedures for the select parcel proceeding outlined the Hagy and approved in Yaras and Wolf, supra, were the proper methods to be used in an inequality trial. In the 1961 amendment to RPLT § 720, subd. 3, the Legislature had provided that evidence of state equalization rates were admissible in conjunction with a sample parcel proceeding. No change was made in the method by this amendment.

The O'Brien case, supra, which followed in 1967 held that the state rate standing alone was insufficient 'to sustain the finding of inequality in a particular assessment' (p. 595, 285 N.Y.S. p. 848, 232 N.E.2d p. 848). The majority in O'Brien noted that the amendment of RPTL § 720 continued a requirement for the selection of parcels to prove...