Posts Tagged ‘Paul Sabatino II’

Long Island’s Special Taxing Districts

Thursday, August 19th, 2010

How outraged citizens are dumping the status quo

By Spencer Rumsey on Aug 19th, 2010

Two long Island women. One from Suffolk, the other from Nassau. One a Republican, the other a Democrat. Rosalie Hanson of Gordon Heights and Laura Mallay of South Hempstead didn’t know each other when they first found the cause that would change their lives, but it was this cause—fighting special districts—that eventually brought them together. 

Special districts are the lesser-known taxing entities that provide services such as water, fire protection and sanitation, for example, layered within the network of county, town and village municipalities. Nassau has more than 200 of them. As the Long Island Index, a nonprofit study funded each year by The Rauch Foundation, has pointed out, “Having so many separate taxing districts contributes to the high cost of living on Long Island.” With their own tax lines, these entities often operate like mini-fiefdoms hidden in the shadows.

As these women would discover, uncovering them is not easy; removing them is even harder. It’s a battle being waged throughout New York State, thanks to the recently enacted, attorney general-penned Citizen Empowerment Act, which enables residents fed up with exorbitant fees to simply dissolve the entities altogether. But even with this weapon, eliminating these costly entities is easier said than done, as the two unsuspecting friends would also soon find. 

Hanson’s Suffolk community has the distinction of paying the highest fire district taxes on Long Island. Carved out of Coram, Middle Island, Yaphank and Medford, Gordon Heights has four zip codes for its 1.7 square miles but one fire district with an average household tax charge of $1,500, quadruple the amount of nearby areas. Back in 2006, a couple of Hanson’s friends went to a conference on Nassau County’s special tax districts held at Hofstra University, where they heard Laura Mallay speak about paying twice what her Nassau neighbors pay for garbage service.

 The conference was the brain child of then-Nassau Comptroller Howard Weitzman, whose office the year before had audited five sanitary districts in three towns.

“Everyone needs garbage collected, clean drinking water and fire protection,” Weitzman said at the time. “But Nassau residents can pay two or three times as much for the same service depending on the district in which they live. Our audits unveiled millions of dollars of waste by some special districts, and a general lack of accountability, transparency and oversight.”

Speaking to the Press while vacationing recently in the Canadian Rockies after overcoming a serious illness that hindered his re-election campaign last year, Weitzman summarized his studies: “We found that the taxpayers in the garbage districts in the Town of Hempstead could save approximately $20 million if their garbage costs were reduced to the garbage costs of the town,” he says.

Taking on special districts was far from Laura Mallay’s mind eight years ago when she was talking to a friend on the phone and looked out her kitchen window as a man leaped into her backyard and tried to steal one of her kids’ bicycles. “I was fit to be tied,” recalls the mother of five (she had only three children back then). She hung up and confronted the man. “He tells me, ‘These people are chasing me!’” She told him that the police would help him, and she called 911. It turned out the people chasing him were the police. The man had just invaded a nearby home and was on the run. “The guy had a gun! Who knew?” But it’s that kind of indomitable spirit that typifies Mallay even today. 

Trial By Fire
Those heroics impressed Mallay’s husband James, an electrician, and garnered support from her neighbors, who encouraged her to rekindle her block’s dormant civic association. Naturally, their biggest issue was their property taxes. And that interest led them to then-Nassau County Assessor Harvey Levinson, who had begun looking closely at the county’s taxing districts, particularly the South Hempstead Fire District and the Town of Hempstead Sanitary District No. 2, which he found charged more than similar districts. In the case of fire taxes, Levinson told the Press recently from his home in Florida, Mallay’s community was paying a tax rate of $46 while Manhasset was paying only $9.

“It’s $543 for garbage tax in Laura Mallay’s area,” Levinson says, “and if she lived in Merrick, she’d be paying $263.”

Mallay invited Levinson to talk about special tax districts at a town hall meeting in March 2005 at the elementary school with her group and two other civic associations from Baldwin Oaks and Birchwood, all three in the same sanitation and fire districts.

“The auditorium was packed to the brim,” Levinson recalls. “And what was parked outside? A big fire truck! And they had brought in firemen from Albany in full-dress uniform to picket me! That meeting got to be very, very tense because they were convinced I was trying to close the fire district.”

“They’re all in their gear, they’re all standing firm, and they’re not letting him speak,” Mallay says. “They’re yelling. It was crazy.”

For Mallay, it was a rude awakening. Although her father was active in the Nassau County Democratic Committee, she’d never realized how political fire departments can be. At the urging of the other civic association members, she decided to run for commissioner of her sanitation district.

“These mini-governments across Long Island are what is leading to these incredible taxes that we all pay,” Mallay tells the Press. “People have different feelings about fire, schools and water. But if you can’t fix garbage, you can’t fix any of it!”

The trash collectors see it differently.

“The vast majority of [the disparity in household fees] is the level of service and the assessment,” says Bob Noble, the secretary to the board of commissioners at Sanitary District No. 2, where he began working 31 years ago on the back of a garbage truck. “This special district has the lowest assessment. We have a very small commercial base in Baldwin and it’s non-existent in South Hempstead.”

Levison disagrees.

“The Sanitary District No. 2 in Baldwin is what I call an invisible government,” says Levinson, adding that most residents don’t even know that it imposes a different tax rate from the town’s. “The way to relieve some of the tax burden,” he says, “is to have the district dissolve itself. As long as that sanitary district is around, it has to have a tax rate.” He said most of the sanitation workers would keep their jobs with the town because “garbage is a growth industry.”

Bob Noble is the sanitary district’s secretary to the Board of Commissioners and a volunteer Baldwin fireman.

So Laura Mallay threw her hat in the ring, so to speak, and challenged Gerard Brown for sanitary commissioner in 2005.

“They came after me hard,” she recalls, shaking her head and sighing. “They were terrible to my children. Certain kids weren’t allowed to play with my kids anymore!” As she remembers the friends who stopped talking to her, a steely resolve seals her hazel eyes

“You know, they did me a favor. If somebody is going to turn their back on you over a difference in beliefs, then they’re not really somebody you want in your life anymore or around your children, right?”

She lost big, but her struggle brought her an invitation to speak at Weitzman’s conference at Hofstra, where she met friends of Rosalie Hanson, who had been confronting Gordon Heights’ onerous fire district taxes for almost two decades.

Up In Smoke
When Rosalie Hanson moved about a mile and a half up the road from Coram in 1986 and bought a new three-bedroom ranch in Gordon Heights with her husband Alex, she was shocked to find out that she’d be paying $1,000 more for fire service than her sister, who had just bought a house in the same Medford zip code. A year later the Hansons got the state comptroller to audit the district, originally set up in 1952, and learned “there’s nothing you can do about it,” she recalls.

“As the community grows, the tax rate would go down, we were told,” says Hanson, a registered Republican. “Even though we added more homes, our taxes still went up.”

And so they fumed until 2006, when their district’s plight landed on the Sunday cover of Long Island’s daily newspaper.

“My husband came home with the paper, and I shouted, ‘Oh, my God, it’s Gordon Heights!’” Hanson recalls. “I reached out to some neighbors and we were off and running.”

An April protest demanding special district audits gathers outside Nassau Comptroller George Maragos’ office in Mineola.

They formed a group and educated themselves. They learned about a Brookhaven Town law that would let them dissolve their special tax district if they collected enough signatures on a petition to put the referendum to a vote. The catch, she says, was that “those who signed the petition had to represent 50 percent of the assessed value of the area.” It was daunting, but since her district had about 900 homes, Hanson’s group thought they could pull it off.

“It took six solid months,” Hanson says. “Some people would not sign out of fear. They thought some other emergency services would blacklist them, so I had to work twice as hard for those people who live in fear, you know?”

Her group turned in the petitions in August 2006, only to learn in October it was denied on a formal technicality. But that rejection only spurred them on. The following year, then-Gov. Eliot Spitzer set up a Commission on Local Government Efficiency “to devise a plan to consolidate some of the 4,200 independent taxing districts statewide and to make the remaining districts more cost-efficient,” his press release said. The commission held a public forum at Hofstra University where Laura Mallay, who by that time had formed a nonprofit group called Residents for Efficient Special Districts (RESD), invited Rosalie Hanson to speak. And so the connection was forged.

Huntington-based attorney Paul Sabatino II, who’s worked in Suffolk County government for many years and is now in private practice, got involved in Rosalie Hanson’s struggle in 2008 after the Town of Brookhaven had rejected her group’s petitions. Sabatino still remembers the shock he felt when he first saw the residents’ tax bills.

“Nobody in the State of New York should be paying what those people are paying,” Sabatino says. “You look at that and you say there’s got to be a remedy.”

In rejecting the group’s petitions the town had cited New York State election law, “which has nothing to do with it,” Sabatino says. “I think the reason beneath the surface was that it was a hot potato, and they didn’t want to confront the issue head-on.”

State Sen. Brian X. Foley (D-Blue Point), a former Brookhaven Town supervisor, explains the town’s quandary: “You have some neighbors pitted against others,” he says. “The fire department has been the focal point of that community…for decades. The town is trying to be as prudent as they can on this one.”

A picture from inside Rosalie Hanson’s living room, where the battle against special districts is being waged.

In a snowstorm on New Year’s Eve in 2008, Hanson’s group delivered their new petitions to town hall, still having to ensure that the signers represented at least 50 percent of the district’s assessed valuation.

“It was reviewed forever,” Sabatino says of the town’s process. For months the group heard nothing. Then one morning last October Sabatino says he got “a frantic call” that one of the town’s attorneys was reportedly telling people at a public meeting in Gordon Heights “how you can take your name off the petition,” he recalls. “So much time was going by, and then to hear that they were actually giving advice on how people could take their names off the petition! I went ballistic.”

Later that month a reporter from the North Shore Sun, which had named Hanson its “person of the year,” asked her reaction to the story he was working on: the Town of Brookhaven had accepted her group’s petition. Apparently, she was not the first to know.

“They sent me a certified letter of rejection in 2006, so why wouldn’t they send me a certified letter in 2009?” Hanson asks, incredulity rising in her voice.

Subsequently, the town hired Emergency Service Consultants International, a consulting firm headquartered in Oregon with an office in North Carolina, to conduct a $91,000 feasibility study of consolidating Gordon Heights. The study finally began this June, and the final report was supposed to be done by October. But Phil Kouwe, the project manager, told the Press his firm is still waiting for data from the county and the state, particularly regarding Gordon Heights’ emergency response time and the volume of calls, so the study can be completed. He blames “the wheels of government” for the delay. 

“I’m not freaking out by how long it’s taking,” he adds.

Nor is Rosalie Hanson, who remains eternally upbeat.

“For the past five years it’s been total dedication,” she says. “It’s time, energy and money out of my own pocket but I feel it’s worth it in the long run. It will give the people in this community a better quality of life because they’ll have more money in their wallets to spend on their families.”

Sabatino has nothing but admiration for the perseverance of Hanson’s group.

“If the average citizen knew what they went through, they’d be held up as heroes!” says Sabatino. “Every obstacle was put in their way.”

The Gordon Heights fire district is still charging its high tax rates, but Hanson’s struggle to reverse course has already produced one stunning success in the realm of real government reform: the New York Government Reorganization and Citizen Empowerment Act, which became effective March 21. The attorney general’s office reportedly followed up recommendations from Spitzer’s 2007 commission, which had heard Hanson recount her efforts.

“I was told by his office that our plight was the inspiration for him to change the law,” Hanson tells the Press.

“I have to give [Andrew] Cuomo a lot of credit,” Sabatino says, “because he not only saw the issue but rather than grandstanding on it and just having a press release or two like a guy like [Steve] Levy does, he actually followed through and pursued it to its end, and he fought off all the attempts to amend it. And the Gordon Heights story is so egregious it became the catalyst for the reform legislation.”

Pros And Cons
The Citizen Empowerment Act, shorthand for the new legislation, provides three routes to consolidation or dissolution: the county executive and the county legislature can submit a master plan to a county-wide referendum; the taxing district’s own board could initiate the process (as some small villages upstate have done) and put up its plan to a referendum; or the residents within the district could launch a petition drive to get a referendum on the ballot, provided they obtained 10 percent of the district’s voters or 5,000 voters (whichever number is smaller) to sign the petition.

“When a majority of electors vote yes to consolidate,” explains Andrew Calderaro, project director of the Nassau County Government Efficiency Project, set up by the nonprofit Long Island Progressive Coalition to work with grassroots’ groups like RESD to implement the law, “the governing body must meet within 30 days of the certification of the vote and create a plan within 180 days of the certification. This plan is subject to public hearings, must appear in newspapers of general circulation, and must appear on the governing body’s website.”

To repudiate that plan, citizens would have to launch another petition drive but gather more signatures than were required before: 25 percent or 15,000 of the registered voters. If voters reject the referendum the first time it comes up for a vote, there’s a four-year moratorium on any new attempts to dissolve or consolidate the particular district.

In the first week of June 2009, the bill passed overwhelmingly thanks to Assembly Speaker Sheldon Silver (D-Manhattan), who extinguished a push to eliminate fire districts from the law.

But the pushback began immediately. State Sens. Craig Johnson (D-Port Washington) and Foley, plus Assemb. Michelle Schimel (D-Great Neck) have proposed a bill that would exclude fire districts as well as protect towns and villages by raising the required number of petition signatures, prolonging the time-table for government action and mandating that a study of the possible financial impact of the change be made available to the voters as part of the initial process, rather than after the referendum.

“I view the Cuomo legislation as really a threat to the way of life for the residents who live in my district and really for the residents who live throughout Long Island,” says Johnson, whose district includes 33 villages and several special taxing districts. “It’s poorly drafted, it’s poorly constructed, and it won’t really provide any tangible savings.”

Firefighters and mayors want the chapter amendments but for different reasons. Ostensibly the fire districts say that doing away with volunteers would require replacing them with full-time paid fire fighters, which would raise the costs to the taxpayers who dissolved their district, as well as adding to the emergency response time.

“If in the process I might disenfranchise 55 or 65 volunteers, and I have to pay to replace them,” says Kirby Hannan, a lobbyist for the Firemen’s Association of the State of New York, which represents the volunteer fire districts, “then I didn’t save any money. As a taxpayer I want to be able to make an informed decision. And we don’t think the bill does that right now.”

“I am all for empowering the people but it’s got to be informed consent,” says Schimel. 

Village officials say they’re worried that voters might support a referendum without knowing how much it might truly cost to get rid of their municipality.

“The law is intended to empower the voters,” says Barbara Van Epps, deputy director of the New York Conference of Mayors. “But we would argue that it’s tough to empower them without educating them at the same time,” she says. “So our fundamental concern is the fact that the vote takes place before the study. And we have some real concerns about that.”

The mayors also worry that a bunch of disgruntled citizens emboldened by the low threshold of petition signatures could subject the villages to a constant barrage of harassment. As an aide to one of the amendment’s sponsors said, “Have you ever gone to a town board meeting? Do you know how many crazy people show up? Let’s be honest.”

The aide understood the rationale for the law, but still found fault with it. “If it’s going to be more democratic, fine, but it also took some power away from the local entities themselves.”

Doing that seems to be Attorney General Andrew Cuomo’s intention, echoing the time-honored sentiment of Oliver Cromwell, who told the Rump Parliament in 1653, “Be gone, rogues, you have sat long enough!”

In his campaign for governor, Cuomo has a compelling riff on the suffocating layers of the Empire State’s taxing bureaucracies. Take this spiel from his acceptance speech at the state’s Democratic Convention in Rye: “There are 10,000 local governments in the State of New York. Ten thousand! Town, village, lighting district, water district, sewer district, a special district to count the other districts in case you missed a district!”

Given the staggering problems facing our state (another multi-billion dollar budget deficit on tap for next year), it’s unlikely the amendments to Cuomo’s law will rank high on the legislative agenda. But if they do come up for a vote, they might pass, considering that even the Long Island Progressive Coalition’s Lisa Tyson wouldn’t mind.

“We have no problem with fire departments and villages being left out of the law,” she tells the Press. “Those are not the special taxing districts we’re talking about. It’s the garbage, the sewer, the water. Those are the ones with the real abuses.”

Her group intends to launch a petition drive to dissolve either Sanitary No. 2 or Sanitary No. 6 later this month, once the local grassroots’ group is ready to hit the street.

Tyson agrees with Schimel’s desire to prolong the study process, finding the 180-day time frame “ridiculous.”
“Governments can’t tie their shoes in that amount of time!” she says. “If they create a crappy plan, then what’s the point? We don’t want to make things worse!”

But she does have one overriding concern, she admits, and it has to do with the ambition of the man himself who helped draft the law.

“Cuomo won’t be in the attorney general’s office next year,” Tyson says. “How much will the attorney general’s office really help if it’s a bad plan? How much will they really get involved?” She says advocates can’t rely on an aggressive comptroller’s office.

“Auditing is great,” she says, “but it doesn’t change policy.”

Some supporters of the Cuomo law like it just the way it is. They say the amendments are intended to water it down for the special interests. 

Sabatino has little patience for those trying to amend Cuomo’s law.

“I’ve tried to understand the arguments that they’ve raised but it’s nothing more than a defense of the status quo,” he says. “I think [Cuomo] did a brilliant job of providing uniformity and simplicity.”

Predictably, Foley took umbrage at that assessment.

“Even the most brilliant laws need improvements!” he counters. “Let me put it this way: I didn’t run for office and spend time away from my family to go to Albany to protect the status quo!”

The People Squeak
One thing that does protect the status quo is citizens’ inertia, and it may work against those who want to put the Cuomo law into action.

“To get people to come out to vote, they have to be angry about something, and very few people are angry about, for example, their garbage collection,” says Weitzman, the former Nassau comptroller. “In fact, we found that most people are very satisfied with their garbage collection—even when we pointed out that they were paying extra money for the same level of collection than other people were paying. It was almost like: ‘Consolidation should take place but not in my backyard!’ But with that kind of attitude we’re never going to be able to do anything about our high tax structure.”

Charles Zettek, vice president and director of government management services for the Center for Government Research in Albany, agrees with Weitzman’s analysis.

“It’s the classic conundrum across the country but it plays itself out brutally in New York State. People complain bitterly about high taxes and yet are not willing to give up the services those taxes are paying for. They want their taxes to be cut by somebody else giving up something but not them.”

Zettek is paying close attention to the efforts to dissolve small villages upstate; two referenda are on the ballot this week, and another is up later this month. Out of a handful of so far, only the one in Seneca Falls passed, 51-49, a “flip of the coin,” Zettek says, adding that research showed that its residents would save about $1,000 a year in taxes. “That’s how powerful the no-change impetus is,” he adds.

“It goes back to Machiavelli: How do you change things?” asks Zettek. “Empowering local citizens is going to make some changes but it’s going to come piecemeal. The fault that citizens don’t take the authority they’ve been given constitutionally and actually act upon it is not the fault of the districts. It’s the fault of the citizens not taking their government seriously.”