A state Supreme Court judge ruled last Thursday that Nassau County needed to return $1.3 million of the Town of North Hempstead’s sales tax revenue it withheld to cover Fashion Institute of Technology reimbursement costs for the 2004-05 school year.
Justice Leonard D. Steinman ruled that the statute of limitations for the county to take the money had run out.
“The court’s decision is good news for our taxpayers and sets to rest the county’s attempt to balance their budget on the back of North Hempstead,” Town Supervisor Judi Bosworth said in a statement. “The $1.3 million that the county withheld equated to nearly half of our expected fourth quarter sales tax revenue, and would have created a financial hardship for the town and its residents.”
In February, town officials authorized litigation against the county in the event that it withheld a portion of the town’s sales tax revenue.
But after the county sent a letter to the town’s comptroller’s office on March 7 saying that it withheld $1,273,496.76, town officials said they would seek a court order blocking the county from the claim.
The state requires that counties pay a portion of tuition for community college students attending schools in other counties.
In 2010, the county began asking for tuition reimbursements from the towns of North Hempstead and Hempstead, as well as the cities of Long Beach and Glen Cove.
Bosworth has said the county’s move to collect money from 2004 was “preposterous.”
Town Attorney Elizabeth Botwin told Newsday that if the town were to lose a large sum of money, it could threaten its fiscal status and Aa1 Moody’s rating.
Town of North Hempstead spokesperson Carole Trottere said the town has paid $4.5 million of the almost $5.8 million it has been charged by the county since 2010 through withheld sales tax revenue.
Trottere also said the town would use the returned funds to pay for this year’s 2015-16 F.I.T. reimbursement costs.
“This is our 2015 sales tax monies which was improperly withheld, and until released to us has created the need to closely monitor the town’s cash position,” she said. “We will use the funds as initially intended in our 2015 Adopted Budget, including paying the county for its properly supported 2015 Community College reimbursement requested.”
F.I.T. is a SUNY community college based in Manhattan and according to Newsday, Nassau and Suffolk counties pay about $10,000 per student in out-of-county fees.
Efforts to reach Nassau County officials for comment were unavailing.
