Gotham Gazette https://www.gothamgazette.com/component/tags/tag/2531 Wed, 26 Jun 2019 02:09:27 +0000 Joomla! - Open Source Content Management en-gb webmaster@gothamgazette.com (Webmaster) The Fading Promise of Property Tax Reform https://www.gothamgazette.com/130-opinion/8586-the-fading-promise-of-property-tax-reform https://www.gothamgazette.com/130-opinion/8586-the-fading-promise-of-property-tax-reform may bdb cc speaker corey jo

(photo: Benjamin Kanter/Mayoral Photo Office)


Despite promising that in his second term he would take on the challenge of property tax reform, Mayor de Blasio appears to be shying away as many leaders have done many times before.

New York City government is extremely dependent upon its property tax, which will generate roughly $30 billion this coming fiscal year, more than any other single revenue source. Not surprisingly, New Yorkers gripe about their property taxes almost as much as about the subways.

The laws and methods used to determine and assess the tax on individual properties are extremely complex and inequitable, but reforming them is a daunting task that will inevitably make some property owners unhappy. For that reason, elected officials have long avoided tackling the problem.

The current New York City property tax system was created in 1981. A lawsuit brought by law professor William Hellerstein in 1975 challenged the legality of the property tax system state-wide as violating the constitutional requirement that all similar properties be taxed equally.

After several missed deadlines, rejected proposals, and a last-minute override of Governor Carey’s veto, a new law was passed that divided properties in New York City into four “classes,” set different percentages of the value of each class of property to be assessed (assessment ratios), limited the amount of total property tax levy to be derived from each class (class shares), and provided for phase-ins and limitations on the growth of tax revenue from different classes so that no one property or type of property would experience a dramatic increase in value and taxation as the new system was phased in.

Thirty-eight years later, New York City looks quite different, property values have soared, and there have been many unintended consequences of the design of the property tax system.

Limitations on phasing in growth in value mean that properties within the same class are often taxed at very different effective rates and the limitations on class shares of the tax levy mean that different classes are shouldering disproportionate amounts of the burden of the growth in overall property value.

One of the most egregious outcomes is that co-ops and condos -- for which the market was very different in 1981-- are in the same class as rental properties and are assessed, not on their market value, but as if they were only generating rental income. The result is many high-end apartments assessed at far lower amounts than their real value; whole residential co-op and condo buildings in some parts of Manhattan are taxed at less than the actual sales prices of individual apartments in the building.

What is to be done? In April 2017 a group of frustrated real estate developers and landlords joined with individual property owners and supportive civic and civil rights groups (including Citizens Budget Commission, which I led at the time and filed an amicus brief) to file a new lawsuit, Tax Equity Now NY LLC vs. City of New York, et al. alleging the current property tax system discriminates against primarily people of color who are low-income renters and homeowners. The lawsuit was filed in the hope that, as had happened in response to the Hellerstein case, city and state leaders would respond with urgency and determination to develop a reformed taxation system.

Instead, both city and state defendants have strenuously resisted the suit, moving to dismiss it on the grounds that the plaintiffs aren’t directly impacted and/or that the state defendants aren’t responsible. The City also infuriated City Council members who wanted to intervene on behalf of the plaintiffs by opposing their application to file a separate brief.

The motion to dismiss was filed in June but it took until September 2017 for the judge to rule that the case could proceed and until February 2018 to rule that the Council members could not intervene in the case. The City filed an appeal and all further action in the case is on hold until that appeal is decided.  

At a breakfast hosted by the Association for a Better New York the day before he was re-elected in November 2017, I asked Mayor de Blasio whether he was going to take on property tax reform. He answered directly and forthrightly that the system needs to be more fair and transparent but that we cannot afford to reduce substantially the revenue it generates and that relying on the judicial system to resolve the problem would be a mistake.

He estimated that it would “take a year or two” to bring all the stakeholders together and come up with the needed reforms and that it would require being “blunt” about the challenges. He said: “I am ready to do it….When I say something that definitively, I mean it…We will create tax reform.”

It took until May 31, 2018, more than a year after the Tax Equity Now case was filed and now a year ago, for the Mayor and the City Council Speaker Corey Johnson to announce the formation of an Advisory Commission on Property Tax Reform. Co-chaired by former city Housing Commissioner Vicki Been, then faculty director of the NYU Furman Center, and former First Deputy Mayor and then Interim COO of CUNY Marc Shaw, the commission was charged to “develop recommendations to reform New York City’s property tax system to make it simpler, clearer, and fairer, while ensuring that there is no reduction in revenue used to fund essential City services.”

No deadlines were specified, but the commission was instructed to conduct at least 10 public hearings.

All the public hearings and meetings were recorded and are available online. The last one was held this past February 28. Yet there is still no word on what the commission will recommend or when it will publish its report. The state legislative session is almost over so it is too late to achieve any changes this year and Been has become a deputy mayor with a lot more on her plate.

So the mayor’s promises notwithstanding, an opportunity to rationalize our property tax system and make it more fair has been missed and the commission looks more like a stalling device than a sincere effort to make tough decisions. Who wants to make New York property owners unhappy during a presidential campaign? As was the case four decades ago, it appears that we will need a lawsuit to compel elected officials to make tough decisions.

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Carol Kellermann was president of Citizens Budget Commission from 2008 through 2018.

 

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

 

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The Fading Promise of Property Tax Reform Tue, 11 Jun 2019 04:00:00 +0000
Cuomo's Budget Priority Balancing Act https://www.gothamgazette.com/state/8397-cuomo-s-balancing-act-on-budget-priorities-congestion-pricing https://www.gothamgazette.com/state/8397-cuomo-s-balancing-act-on-budget-priorities-congestion-pricing gov cuomo long island no tax

Gov. Cuomo on Long Island (photo: governor's office)


Before Democrats reclaimed the state Senate last year, Governor Andrew Cuomo spent years triangulating with the Democratic-controlled Assembly, two factions of Senate Democrats, and the Republican Senate majority. The arrangement allowed him a heavy hand over the legislative and budget agendas in Albany and gave him the ability to claim credit and deflect blame as he saw fit (though critics didn’t always buy his explanations). Progressive legislation regularly withered on the vine unless it had Cuomo’s imprimatur, usually accompanied by some form of mutually beneficial compromise with rogue Democrats and Republicans.

If this year’s budget negotiations have proved anything it’s that old habits die hard and Cuomo is unwilling to ease his stranglehold on state government, even when dealing with members of his own party. He’s continued to strongly, and perhaps shrewdly, set the foundation for negotiations. But some of the policies he has prioritized have long been wedge issues between lawmakers representing New York City on the one hand and upstate and suburban districts on the other.

On a few of the governor’s topline agenda items -- congestion pricing, recreational marijuana legalization, criminal justice reforms, and a property tax cap -- that divide has seemed most apparent this year, at times apparently stoked by Cuomo himself, and the governor has sought to leverage the budget deadline to push for their passage. Notably, he has said he’s willing to allow a late budget to accomplish his goals, which would mean that legislators could lose out on pay raises that are contingent on the budget passing on time, giving the governor additional leverage over the process.

While Cuomo has said he finds himself “liberated” by full Democratic control of the state Legislature and the ability to pass legislation that stalled for years, he’s also been overtly antagonistic to his colleagues in the Legislature, particularly in the state Senate, for what he says is them failing to grasp the necessities of governing, sabotaging the deal to bring an Amazon campus to Queens, and hesitating to follow through on several policies that Republicans opposed for years.

Senate Majority Leader Andrea Stewart-Cousins half-jokingly attributed it to “Senate Democratic derangement syndrome,” but many Democratic legislators have been taken aback by Cuomo’s approach, even if most have not been surprised. After an initial sprint of legislative activity that smacked of Democratic bonhomie, the Legislature slowed down as fault lines and a less rosy picture emerged amid negotiations over complex topics and some apparent backtracking.

With news articles and political commentary pointing to the close bond between Heastie and Stewart-Cousins, and the power of the all-Democratic Legislature vis-a-vis the governor, Cuomo appeared to seek to increase his leverage, by having certain Democratic candidates sign policy pledges during last year’s campaign, setting out his “first 100 days” agenda in December, casting blame on Long Island Democrats for not doing enough to keep the Amazon deal on track, and more.

Of late, he’s focused his top priorities on issues that alternately appeal more to New York City Democrats (congestion pricing, criminal justice reform) and suburban Democrats (property tax cap). He’s rallied on Long Island and in the Hudson Valley with Democratic senators, declaring he would not approve a state budget without the annual tax cap made permanent, even though, as Heastie has said, the current cap doesn’t even expire until next year. Meanwhile, he’s publicly told those same Democratic senators, who may be hesitant about criminal justice reform, to pass it in the budget and “blame me.”

It may all, or mostly, work out for Cuomo by the April 1 budget deadline, a major test for all the parties involved, but certainly an opportunity for Cuomo to both deliver on progressive promises and still show he’s in charge.

“This isn't a game of risk, this is real life,” said Rich Azzopardi, senior advisor to Cuomo, of the budget process in a statement responding to Gotham Gazette’s inquiry about the governor’s budget negotiation tactics and whether they were intended to divide Democrats as some have suggested. “If you excuse us, we're going to concentrate on developing a budget that works for all New Yorkers and I believe our partners in the legislature are doing the same.”

“I think for the governor, his decisions about priorities in the state budget are about how can he get things done that he can brag about later and that continue to advance the narrative that he wants,” said Evan Thies, co-founder of Pythia, a political strategy firm, “which is that he is still very much the most powerful person in the state and also on a national level a Democrat that can get things done and who seems to have moved his state to the left.”

Overwhelmingly reelected for a third term in November, Cuomo was emboldened and quick to show how he would approach the newly elected Senate Democratic majority. He rallied with newly elected and returning members of the state Senate on Long Island shortly after the election, pledging to ensure that New York City pays its “fair share” of funding for the Metropolitan Transportation Authority (MTA) even as legislators within the city were hammering him for starving the agency of funding, meddling with its affairs, and letting the city’s subways slide into chaos.

Cuomo pitched congestion pricing as the chief remedy to MTA problems, insisting it must be done in the budget but offering few details of how it would be implemented. For lawmakers in suburban areas outside New York City and even for those in the outer boroughs, it proved divisive and it appears that any proposal that will be included in the budget will include several key carve-outs and funding set asides for the Long Island Rail Road and the Metro North Railroad. The governor has also called for making it state law that the city and state must split 50-50 any MTA capital plan shortfall not covered by dedicating funding streams like that from congestion pricing.

Cuomo has also launched a campaign to make the state’s 2 percent cap on annual property tax increases permanent, which is currently in place everywhere outside New York City. The cap has been a crowning Cuomo achievement, winning praise from members of both political parties, and renewed multiple times. He’s rallied on Long Island three times in two weeks to push for it and has said he will not sign a spending plan without it, even saying that he’s willing to let the budget be late.

Even the governor’s proposal to legalize recreational marijuana seemed destined to create divisions along regional lines. It gave counties the ability to opt out of allowing sales, and several county executives -- including both on Long Island -- have already expressed intent to do so (something Cuomo said was not helpful in getting legalization passed in Albany). Meanwhile in New York City, which accounts for about a third of all regular marijuana users in the state and would make up an overwhelming part of any legal market, Mayor Bill de Blasio has already taken steps to reduce enforcement and has embraced legalization.

There are several key aspects of legalization to work out, and It’s hardly a surprise that the governor said last week it appeared unlikely legalization would be in the budget, even though he was hoping to tap the revenue from it to fund the MTA. But even Cuomo’s characterization of negotiations was disputed by lawmakers, such as Senator Liz Krueger, lead sponsor of legalization legislation, who said the parties aren’t that far apart. (Cuomo shifted to embracing a pied-a-terre tax for New York City luxury apartments that would replace marijuana funding for the MTA, though that has also hit some roadblocks.)

“You’ll notice a trend in the things that are actually getting done in the budget, which is that suburban Democrats agree with all of them,” Thies said. “They are clearly the new pivotal block in Albany and that is well represented” in the marijuana bill’s opt-out provision, the fact that congestion pricing will pay for commuter railroads and that issues like the tax cap “which may not have universal support within the Democratic caucus, are still being advanced aggressively.”

Criminal justice reform, including banning cash bail and instituting speedy trial and open discovery reform, may be one of the governor’s remaining priorities that does not necessarily have a substantial budget impact. But Cuomo has nonetheless insisted it must pass with the budget -- citing it as an important decision deadline -- despite various concerns being raised by district attorneys and lawmakers from more conservative districts outside the city, and by more progressive lawmakers and advocate who have certain prerequisites for new pretrial incarercation rules.

“I've had 7 years, 8 years with a Republican Senate with half a loaf, half a loaf, half a loaf—and getting these controversial issues and having to compromise everything,” he said in a Monday interview on WAMC radio with host Alan Chartock. “So having a Democratic Senate is most liberating for me because I don't have to take half a loaf and criminal justice is one of those issues.”

On issues like marijuana legalization and the broader criminal justice reform package, Heastie and Stewart-Cousins have not said anything is off the table; rather, they have indicated that both can be successfully approved after the budget and need not be rushed through by April 1. But the budget is where the governor enjoys maximum leverage and he has said that lawmakers can assign him the blame for passing controversial bills because there is no guarantee they will follow through in the post-budget session.

“I'll take the blame,” he said at a March 11 news conference, when asked about the criminal justice reform package and whether it would lead to a backlash for suburban legislators. “When it's in the budget, it allows everybody to say, ‘It wasn't me, it was the governor.’ Let's be honest, right? That's what the budget allows you to do. They all go and they say, ‘Yeah, I didn't support that, but the governor insisted on it.’ And by the way, it will be true. It will be true. Blame me.”

Dr. Jeanne Zaino, professor of political science at Iona College, described the governor’s strategy as “a masterclass in terms of managing Albany,” which she said has practically become a “one-party city” with Republicans out of power. “It’s brand new territory for [Cuomo], having the Democrats in control and in the past, he was able to triangulate with Republicans,” she said. “In my mind, he’s trying to do a similar sort of dance, if you will, but in this way playing the suburban, upstate Democrats off the more urban downstate on a variety of issues...I think congestion pricing in my mind and the property tax cap are two of the biggest [issues] because they so glaringly pit the two against each other.”

For advocates who have seen the type of horse-trading typified by the state budget process, the governor’s push has raised some concerns. Nick Malinowski of VOCAL-NY noted that legislators from the Hudson Valley and Long Island haven’t been supportive of criminal justice reforms, for instance. “We are very concerned as this moves into budget negotiations that issues like bail, like discovery reform, will be negotiated against other issues like property taxes and pay raises and all these other things,” he said. “That is definitely something we’ve seen in the past with Republicans, Democrats, and Cuomo...From a democracy standpoint, it’s a bad way of doing government.”

Nick Sifuentes, executive director of the Tri-State Transportation Campaign, however, disagreed that the governor’s efforts have been divisive, and credited him for bringing together a “fractious conference” on congestion pricing at least. “It’s the single largest and difficult thing they’ve taken up this year,” he said. “I really feel like the governor has actually generally played a helpful role in trying to get this thing to the finish line….I don’t think this has been a year that the governor has very aggressively played sides off against each other to try and win something.”

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by Samar Khurshid, senior reporter, Gotham Gazette
     

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Cuomo's Budget Priority Balancing Act Wed, 27 Mar 2019 04:00:00 +0000
What's the [DATA] Point? 1981, New York's Property Tax System https://www.gothamgazette.com/state/8081-what-s-the-data-point-1981 https://www.gothamgazette.com/state/8081-what-s-the-data-point-1981 whats the data point


What's The [Data] Point? Episode 59 - 1981 [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

tempsnip

The data point for today is 1981, the year in which the State Legislature enacted S7000A, the landmark bill that formalized the current property tax system for New York City. A response to the Hellerstein case, which found the system was in violation of State law, S7000A essentially codified the status quo.

In doing so, it established a system of property classification, fractional assessments, caps, phase-ins, and class shares that is still with us 37 years later. These structural features and statutory requirements are the root of the system’s inequities and complexities. A home worth $500,000 can face the same tax bill as a home worth $1.5 million, while the value of a condominium unit, according to the City, is a fraction of its sale price. In fact, some buildings have values that are below the sale price of individual units. And commercial and rental property faces a higher average property tax burden than 1-, 2- and 3-family homes.

These inequities and problems have led to repeated calls for reform, including pending litigation. This past May, Mayor de Blasio and Speaker Johnson formed the Advisory Commission on Property Tax Reform. In September, the Citizens Budget Commission, the Regional Plan Association, and NYC Robert Wagner School of Public Service held a panel to discuss the problem, inequities and potential reforms

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

Read more by this writer.

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What's the [DATA] Point? 1981, New York's Property Tax System Sat, 17 Nov 2018 05:00:00 +0000
A Misguided Mandate in Reforming the City Property Tax System https://www.gothamgazette.com/130-opinion/8007-a-misguided-mandate-in-reforming-the-city-property-tax-system https://www.gothamgazette.com/130-opinion/8007-a-misguided-mandate-in-reforming-the-city-property-tax-system de Blasio Corey Johnson town hall

Mayor de Blasio & Speaker Johnson hold a town hall (photo: Ed Reed/Mayor's Office)


This May, Mayor Bill de Blasio and City Council Speaker Corey Johnson announced an advisory commission to recommend reforms to New York City’s property tax system. According to its website, the commission is charged with “developing proposals to make the system simpler, clearer, and fairer.” However, it has also been given the mandate to do so in a way that is revenue neutral -- a goal that is both counterproductive and unnecessary.

For eight years, I had the good fortune to serve as the Press Secretary for the New York City Department of Finance. Every year, between September and February, I would meet at least weekly with the team of senior assessors to try to understand how the market had changed over the past year, what new rules and laws had taken effect, what changes we were making internally, and how all of this would impact property owners. For every change made, some property owners benefitted and others did not.

“Revenue neutral” is a political term that implies that when the City makes a change to the system, it’s not being done to raise your property tax bill, even though it might. If it is unfair now, and the system is changed to be more equitable, virtually everyone will either have to pay more or pay less. When the impact is not neutral for anyone at the end of the day, saying it is just obscures the administration's stated intention that the City does not end up with less money to spend come budget season.

The commission will make its job a great deal easier if it does away with this artificial constraint. Without giving due consideration to the revenue side of reform, commissioners would be free to think about the issues that would result in real equity among property owners. They could explore the option of including owner-occupied co-ops and condos in Class 1 (along with 1-, 2-, and 3-family homes) and valuing them based on their sales price, where most experts have agreed they belong for the past 25 years, without worrying that the change would bankrupt the City. They could even consider more progressive ideas, like valuing investor-owned residential properties as the income producing properties they are.

For people who buy a home to live in, the value is in the sale price of their property. For people who buy a home to use as a rental or an Airbnb, the value is in income-producing capacity of the property. Because investors can capitalize on both, the revenue flows and the appreciation of a property’s market value, they are frequently willing to pay more than the average homebuyer. This, in turn, drives up market values in neighborhoods and makes it more difficult for current residents to buy a home.

Owning a home is the greatest wealth-building opportunity that residents in this country have, and we should make sure our system does not inadvertently inhibit the ability of New Yorkers to own their home just because they would use it differently from an investor.

Without the revenue neutral constraint, the Commission could also give real consideration to reforming the State-mandated tax caps that have created disparities between rich and poor neighborhoods, which are currently the basis for a lawsuit claiming the system is biased against low-income residents and people of color.

These are not the only ideas out there for making the system fair, and the Mayor and the City Council should be commended for creating a commission and for holding public hearings to gather New York City’s collective wisdom to consider for their final proposal. However, neither these, nor any other changes can be seriously considered through a revenue neutral lens.

That is not to say that the City cannot implement a revenue neutral change to the property tax, however.

Assessments are only one input into a property tax bill, and the City’s goal should be to make sure that those assessments are accurate and fair. The other major input into this equation is the tax rate, which can be raised or lowered by the Mayor and City Council as they see fit during the annual budget process. If the Mayor and City Council are serious about holding the line on property tax revenue, they already hold that power. No commission necessary.

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Owen Stone is a government performance and innovation expert who served at the New York City Department of Finance from 2006 to 2014. On Twitter @owenstone.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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A Misguided Mandate in Reforming the City Property Tax System Sun, 21 Oct 2018 04:00:00 +0000
City Council Pushes Property Tax Rebate as De Blasio Continues Stall on Broader Reform https://www.gothamgazette.com/city/7671-city-council-pushes-property-tax-rebate-as-de-blasio-continues-to-stall-on-broader-reform https://www.gothamgazette.com/city/7671-city-council-pushes-property-tax-rebate-as-de-blasio-continues-to-stall-on-broader-reform Corey Johnson City Council hearing

Speaker Johnson & Council members (photo: John McCarten/City Council)


The New York City Council has been pushing for temporary relief for lower- and middle-class homeowners in this year’s budget, calling on Mayor Bill de Blasio to fund a one-time $400 property tax rebate that would cost about $187 million in total. Council Members, some of whom are homeowners themselves and could potentially qualify for the rebate, say it’s a much needed measure that could help thousands of New Yorkers reduce their annual tax burden.

The Council’s proposal set a $150,000 threshold for households to qualify for the $400 rebate, which would reach roughly 467,000 homeowners, according to the Council’s finance division. The proposal is merely a stop-gap, in lieu of broader reform of the city’s property tax system, which the mayor has promised but has been slow to act on.

At least a few Council members themselves stand to benefit from the rebate, given that the City Council voted in 2016 to increase members’ salaries from $112,500 to $148,500, while at the same time limiting the outside income they can earn, meaning that individual members fall just under the Council’s income threshold for the rebate. Most Council members, like most residents of the city, are renters, but a few do own property according to the latest available disclosures filed with the city Conflicts of Interest Board.

A Council spokesperson said member income was not part of the discussion on the rebate, which would reach about 75 percent of home, coop, and condo owners.

“Middle class homeowners deserve a break, which is why the City Council proposed a $400 refund for them in this year’s budget response,” said City Council Speaker Corey Johnson in a statement. “We know that every little bit counts and felt this refund could help people while we work on the bigger issue - reforming the broken system.”

Council Member Joseph Borelli, a Republican from Staten Island and a homeowner, says he wouldn’t qualify for the rebate since he earns about $6,000 from teaching at College of Staten Island, which he’s allowed to do under the Council’s rule change, which includes exceptions for forms of passive income and a few activities like teaching. That extra income puts him just over the top.

[Related: City Council Members Still Navigating Outside Income Divestment Ahead of Deadline]

Borelli, whose district is largely homeowners and is one of the main proponents of the rebate, isn’t concerned about the optics of Council members potentially benefiting from a rebate that they’re pushing so hard, though he conceded that members could be forthcoming about qualifying for it. “It’s like saying we all receive the public benefit of a new stop sign or a new highway,” he said. “If there’s something that’s done as a public benefit to all taxpayers, if you wanna require people to disclose that they’re going to get a check for 400 bucks in the mail, I’m certainly happy to do that. Also saying I won’t qualify myself.”

He rightly predicted that even members who own property will likely pass the threshold since many file their tax returns jointly with their spouses. “It’s an interesting question, I just don’t have the answer. But it sucks that I won’t be getting it,” he half-joked. “That’s on record, too.”

[Listen: Max & Murphy Podcat: City Council Member Joe Borelli]

Borelli is among the members who were particularly disappointed by the mayor’s refusal to address property taxes in his $89 billion executive budget proposal, released late last month. A joint statement from Borelli and Council Members Justin Brannan, Steven Matteo, Paul Vallone, Barry Grodenchik, and Mark Gjonaj noted that the administration had yet to address “the glaring inequities of a property tax system that charges the owner of a modest home in our districts more than the owner of a multi-million dollar brownstone in Park Slope,” a clear reference to de Blasio’s Brooklyn homeownership, which includes two houses that he currently rents out. De Blasio would not be eligible for the rebate given his $258,750 salary.

“I know we speak for just about every property owner in the five boroughs when we say, ‘C’mon man, give us a break!,’” the Council members concluded.

“[L]ike many of his constituents, Councilman Matteo owns a home,” said Peter Spencer, a spokesperson for the minority leader, also a Staten Island Republican, in an email. “His household income fluctuates, so it would depend on the tax filing year as to whether he would meet the $150,000 threshold. He has been advocating for a property tax rebate for years for all homeowners, to alleviate the financial burden skyrocketing property taxes are having on so many families and seniors.”

The other members on the statement are all Democrats, as are de Blasio and Speaker Johnson, but they represent areas of the city with higher home ownership rates than most other Council members. Grodenchik and Vallone’s offices did not respond to voicemails requesting comment. Reginald Johnson, Gjonaj’s chief of staff, said the Council member owns property but files a joint tax return with his wife, who is a nurse, and would not qualify for the rebate.

De Blasio has repeatedly said that he would launch a commission to look at the city’s property tax system and to recommend fundamental change in how taxes are assessed. Unlike other taxes, the city does not need approval from the state Legislature to amend its property tax rates, which have remained flat over the last few years but have been evenly applied across the city with no accounting for varying property values, while assessments continue to rise, increasing tax bills virtually across the board.

“We’re going to...go at the heart of the property tax problem and have a commission, working closely with the Council to try and reform fundamentally the property tax to be more fair for everyone,” de Blasio told reporters at his executive budget presentation on April 26. “So, I would argue the best way to address the property tax question is the fix the whole system. Everyone loves a rebate, but it doesn’t fix the root cause, and most rebates are pretty small and then you never see them again. We want to get at the root cause.”

Maria Doulis, vice-president of Citizens Budget Commission, an independent fiscal watchdog, echoed that position while also pointing out that the Council’s interim approach may be flawed. “It’s a well-intentioned proposal,” she said of the rebate, “but it’s too broad a measure to address their concerns.” An umbrella threshold, she said, doesn’t capture the differences in households and property values across the city, so those with a high property tax burden would stand to receive the same benefit as those with a negligible one.

“It’s best to do it with a circuit breaker rather than a flat rebate,” she said, referring to an industry term for targeted property tax breaks based on a percentage of income. “Circuit breakers take into account your income as well as your burden. That’s a better way to do it. Given the complexity and problems with the property tax, I’m not sure adding another wrinkle is the best thing to do.”

Council Member Brannan, who has been advocating for property tax reform since his campaign for office, is a renter but he understands the effect a rebate could have. “I’m a renter, but my landlord certainly would factor that into my rent,” he said.

“Obviously it doesn’t benefit me because I’m a renter but because when I was knocking on doors for nine months in my campaign, that was one of the top things I heard about, was people getting squeezed -- renters too. It all trickles down. Coops, condos, homeowners, everything. It’s a big deal for me. I’m not gonna benefit from it but it’s a big deal,” he added. (CBC’s Doulis said it’s unclear that a temporary rebate would get passed down to renters but that wholesale reform was more likely to have that effect.)

Other homeowners identified in COIB disclosures include Council Members Peter Koo, Jumaane Williams, and Fernando Cabrera.

Cabrera and Williams did not respond to requests for comment. Scott Sieber, a spokesperson for Koo told Gotham Gazette the Council member files taxes jointly with his wife and would not qualify for the rebate. “The rebate is good for all our constituents in the city,” Koo said at City Hall last week.

Council Member Ruben Diaz Sr., a former state senator, said that he has qualified for state property tax credits in the past but has refused to apply for them. “When I was in Albany, they gave credits to property owners and I never took one and I would never apply for it until I retire,” he told Gotham Gazette in the Council chambers last week. “But there are people in the City of New York, homeowners that deserve to take a break on those things. I support the speaker.”

What if he qualified for the Council’s proposed rebate? “I won’t take it,” he said.

The City Council is in the midst of weeks of hearings on de Blasio’s executive budget, while Johnson and others continue to push their top priorities -- the property tax rebate, reduced price MetroCards for people living in poverty, and an added $500 million into reserves -- for inclusion in the adopted budget, which the two sides must agree on by the July 1 start to the new fiscal year.

On the steps of City Hall, Council Member Chaim Deutsch brushed aside any concerns about personal conflicts in pushing for a rebate. “When we’re fighting for issues, a lot of the time we fight for issues that affect us because that’s where we get the experience from, and that’s how we know sometimes how to fight for things,” he said. “Because we as New Yorkers understand sometimes when it’s difficult for a Council member to make ends meet, that we know how difficult it may be for others. So we fight for issues. So you can’t single out one thing over another.”

[Related: De Blasio, City Council Tangle Over How to Spend $1 Billion]

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by Samar Khurshid, senior reporter, Gotham Gazette
     

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City Council Pushes Property Tax Rebate as De Blasio Continues Stall on Broader Reform Mon, 14 May 2018 04:00:00 +0000