Fund the reserve and cut the bill

Our school district, like many in Nassau County, is facing a financial squeeze in the form of fewer enrollments, and every year it has to decide between services, staff or facilities in painful cuts. Take the facilities side. At the September board meeting I watched the district start talking about establishing a capital reserve, similar to Mineola's. As a dad, a business owner and a data nerd, this makes sense: in a volatile economy a buffer is essential to survival. So no issue with needing it. The issue will come when people are asked to fund it. Nobody wants, or can spare, even more in taxes.

But what if we could fully fund a capital reserve and reduce the tax burden on a homeowner at the same time? It is not magic. It is stopping a corporate welfare check that has been written since 1971, stopped making financial sense somewhere in the last few decades, is insufficiently tested, and, most importantly, that the corporations' own filings treat as a rounding error to their profits.

Let me introduce you to the world of school tax abatements: picking up somebody else's share of taxes, PILOTs and IDAs.

What a break is, and what it costs you

An industrial development agency, an appointed board, can take a building off the school tax roll. The owner pays the agency a negotiated amount instead, a payment in lieu of taxes, or PILOT. The school district does not lose a dollar, because its levy is capped and fixed. The difference is spread across every other property in the district. In 2024, about $590 of the school tax on the average Rockville Centre house went to cover four such agreements. Across Nassau the three agencies moved $77.7 million of school tax onto other owners in the last year the State publishes, about $125 on the average county house.

Shift as filed for the year ending December 31, 2024. The per-house figure applies each district's class-1 share of its 2025-26 levy across its class-1 parcels on the 2025 roll. Glen Cove's $5.2 million is left off the per-house column because the city bills its own taxes and its class share is not yet established. Method and every district.

Rockville Centre is fifth of the 32 districts where the per-house figure can be calculated. Seventeen of the 53 districts on the county roll carry no break at all, and two come out slightly ahead.

Fund it and still pay less

Rockville Centre holds no capital reserve. Mineola holds $8.5 million in one, which is why its budget absorbs a bad year and ours cuts positions. Matching Mineola's reserve would take about $135 a year for ten years from the average house. Ending the breaks returns about $590 a year to that same house. Fund the reserve out of the first $135 and the homeowner is still $455 a year better off. The four agreements here moved $4.5 million in one year, more than half of what Mineola's reserve holds in total, and $35.3 million over the eight published years, four times that reserve. The largest of the four has just ended. Nobody has said where that money goes.

Two numbers for every break

Every agreement is two numbers. To the company it is a rounding error. To a homeowner it is a line on a bill that comes every year. AvalonBay owns the two largest projects here and two more elsewhere in the county. Its four Nassau breaks in 2024 came to $4.45 million, about half of its chief executive's pay for that year, and about fifteen cents in every hundred dollars of its revenue. Eight years of Rockville Centre's shift equals thirteen days of one year's AvalonBay dividend. Losing all four Nassau breaks would have moved its earnings from $7.60 a share to $7.57. Search the three public recipients' annual reports and proxies, six filings, for payment in lieu, industrial development, tax abatement or tax exemption, and the words do not appear once.

So much for "we could not have built it without the break." State law lets an agency grant one only for a project that would not otherwise be built. A company that could cover the whole difference out of two weeks of dividends was never unable to build. It preferred not to pay. An Assembly sponsor memo already says it: "the amount of money is negligible to the large, multi-national corporations that benefit from agreements with IDAs."

Would they have built anyway

The same developer built 204 apartments on Stewart Avenue in Garden City in 2013 with no IDA break at all. That building pays Uniondale's schools on $311,909 of assessed value. Its 165 apartments on North Centre Avenue pay ours on nothing. Green Acres Mall was bought by its current owner nineteen months before the Hempstead agency voted it a break, on a mall that opened in 1956. The larger Rockville Centre agreement was approved in 2007, the building opened in 2012, and the break ran to 2026. Whatever the break induced was finished fourteen years ago. Everything since was a transfer.

Nobody checks

The State Comptroller and the Authorities Budget Office both say in writing that they do not verify what the agencies report. The Nassau County Comptroller reviewed the county agency's 2015 to 2019 projects and reported in December 2020 that 69 percent of the projects it examined missed their job goals in at least one year, and that one recipient reported 543 jobs to the agency and five to the State for the same period. When the State audited the Hempstead agency in 2017, it found that at both Green Acres hearings, in its words, "with the exception of TOHIDA officials and a court reporter, no one attended the meeting."

What you can do this month

The people who grant these breaks are appointed, and the boards meet in public.

• Nassau County IDA board, Thursday September 24, 6:15 pm, Legislative Chambers, 1550 Franklin Avenue, Mineola, also livestreamed. This agency holds two of the five agreements filed here.
• Nassau County Legislature, Monday September 28, 1:00 pm, same chamber. Three minutes at the podium, and hand a slip to the clerk's staff. The Legislature confirms the county agency's board.
• Town of Hempstead IDA board, Tuesday September 29, 9:00 am, Old Courtroom, 350 Front Street, second floor, Hempstead. This agency holds the other three, including both AvalonBay phases.
• Hempstead Town Board, Monday October 5, 10:30 am. The Supervisor appoints that agency's board. Council District 4 covers Rockville Centre.

One ask fits all four: publish these breaks by school district, and publish the agency's own cost-benefit analysis before the vote, with construction jobs and permanent jobs on separate lines. I asked our school board for its part on September 10, a public minute whenever an agency notifies it of a break. The five minutes at the podium. The reserve conversation starts at the next board meeting. Bring this to it.

Since last time

• Spoke at the Board of Education on September 10 and left the one-page handout with the clerk. The link above is the recording.
• Filed two records requests with the State tax department. Answers are due October 7 and November 4.
• Wrote to the Village on August 12 through its feedback form. No reply yet.
• Published two corrections to our own numbers, including the count of projects moving money here: four, not five.