Mortgage taxes processed and received by the Suffolk County Bureau fell by more than half to $34.8 million between September and mid-December, compared to $71.7 million for the same period in 2021 because of the impact of the September cyberattack slowed down processing, according to recordings obtained following a Newsday Freedom of Information Act request.
Separately, mortgage tax payments to the 10 Suffolk towns fell by $16.7 million from Sept. 1 to Nov. 30, according to separate information from the County Comptroller’s Office. Disbursements to cities were $12.49 million in 2022, compared to $29.2 million in 2021. The Accounts Office is responsible for disbursing taxes to cities and villages.
Community maintenance taxes processed by the clerk’s office also fell sharply to $26 million for the September through mid-December period, compared to $54.3 million in 2021, according to the clerk’s documents.
Newly elected Suffolk County Clerk Vince Puleo said the processing of mortgage taxes paid by residents and businesses when real estate is sold “is only going to get better and better over time”. In any case, he stressed, “everyone will be made well.”
WHAT TO KNOW
- Mortgage taxes processed and received by the Suffolk County Clerk’s Office fell by more than half to $34.8 million between September and mid-December compared to the same period in 2021 as the impact of September’s cyberattack slowed processing.
- Mortgage Tax Payouts to the 10 cities of Suffolk fell by $16.7 million from September 1 to November 30 compared to the same period a year ago.
- community maintenance taxes Amounts processed by the Clerk’s Office also fell sharply to $26 million for the September through mid-December period compared to the same period in 2021.
Puleo said he hopes to “be able to speak to the rest of the internet community” by the end of the month to bring online tax filing back.
The clerk’s office continued to process mortgage taxes through the end of 2022, but filing had to be done in person rather than through an online system as the county continues to gradually restore its services following the Sept. 8 ransomware attack. Last month, the county said the first signs of the cyberattack were discovered in the clerk’s office, and the clerk’s IT director was placed on administrative leave.
Newsday has reported that the clerk’s office has been demanding higher levels of computer security for months, including a hardware-based firewall, which the county installed in mid-September, a week after the attack. The district said the IT director resisted its recommendation to install a “virtualized” version of the firewall of Palo Alto, California, which also conducted the district’s forensic investigation into the cyberattack.
Prior to the Sept. 8 ransomware attack, the Treasury Department’s bureau was on track to report higher mortgage tax receipts for 2022, according to documents provided to Newsday. Between January 1 and August 31, the office had processed and received $179.2 million in mortgage taxes, compared to $172.1 million for the same period in 2021. Community Conservation Taxes for 2022 however, declined slightly to $127.2 million for January through the end of August from $128.7 million a year ago.
Christopher Como, Assistant District Clerk, said those taking out mortgages pay a 1.05% mortgage tax and a separate record fee, which is processed and received by the clerk, which has developed a workaround for the lack of the online process. He also noted that at the start of the cyberattack, there was a period of up to five weeks where no taxes were processed at all.
“We had to come up with a new way to process this work,” he said. “We do it with an alternative method. It’s not perfect…it’s a little longer,” but it gets the job done.
Every town in Suffolk received lower mortgage tax payouts from September to November last year compared to a year earlier, according to information from the Comptroller’s Office. The cuts represent a delay in disbursements to cities once all mortgage taxes are settled.
Brookhaven’s tax payout decreased $3.7 million to $3.33 million for the September-November 2022 period, compared to $7 million a year earlier. Southampton’s was $3.4 million lower than 2021 – at $1.95 million for the three months of 2022 compared to $5.39 million for the three months of 2021.
Huntington’s declined $2.42 million to $1.58 million compared to $4 million a year earlier. Babylon’s declined $1.5 million to $1.26 million compared to $2.8 million in 2021. Islip saw a $2.38 million decrease in its mortgage tax payout to 1, $81 million compared to $4.19 million.
East Hampton saw its mortgage tax payout decrease by $1.25 million to $936,635 over the period from $2.19 million in 2021. Smithtown’s was down $1.21 million to $896,113 down, compared to $2.1 million a year earlier. Southold’s fell $415,018 to $349,160 in the three months of 2022 compared to $764,178 in 2021. Riverhead’s fell $192,803 to $254,704 compared to $447,507 in 2021. And Shelter Island’s fell $96,454 to $87,552 compared to $184,007 in the three months in 21 months, according to the auditor’s figures.
Southampton supervisor Jay Schneiderman said that while the city has a surplus to meet expected funds from the mortgage tax distribution, the delay is a concern.
“That’s a problem,” he said. “We had a whole lot of money that we would normally have gotten” from the county. There have also been delays in receiving property tax payments from late payers, which are automatically shifted to the county for payment, Schneiderman said.
“We’ll get our money,” he said. “It’s a delay.”
Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.
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