City Council Proposes Property Tax Reform Commission

City Council Proposes Property Tax Reform Commission

City Council Proposes Property Tax Reform Commission
April 23, 2014

During the unveiling of the New York City Council’s response to Mayor Bill de Blasio’s preliminary budget, Council Speaker Melissa Mark-Viverito highlighted property tax reform as a key issue that she wanted to see addressed in the city’s budget report, and called for the formation of a property tax commission to address the inequities in the system.

“What [the budget response] calls for is a committee to study the issue and bring people to the table and really take a look at whatever criticism, analysis and concerns that are being expressed publicly and figure out if there are ways that we can reform [the property tax system],” Mark-Viverito said.

The commissioners would be appointed by Mayor de Blasio and Mark-Viverito, according to the budget response document, and will pursue recommendations with options to ensure any measures are revenue neutral to the city’s budget. Any changes to the tax system would require approval from Albany.

The goal of the commission would be to create a more equitable and transparent property tax system, something that the mayor and Finance Commissioner Jacques Jiha spoke about two weeks ago when Jiha was appointed. During that press conference, Jiha committed to conducting a review of the property tax system, though it is unclear if his own review would dovetail with the efforts of the proposed commission.

The commission would also be charged with looking at how the property tax can be structured to encourage “sustainable and affordable growth,” including issues around affordable housing, the treatment of vacant and underutilized properties and the growth of new businesses and jobs.

As Councilwoman Julissa Ferreras, who chairs the Finance Committee, noted during the unveiling of the Council’s budget response, the commission would be modeled after former mayor David Dinkins’ Real Property Tax Reform Commission, which was established in 1993. Ferreras pointed to the establishment of the Cooperative and Condominium Tax Abatement program, which provides tax breaks for co-op and condo owners, as well as the advent of the Real Property Income and Expense (RPIE) statement—required for owners of an income-producing property that have an assessed value of over $40,000—as two initiatives that were direct results of Dinkins’ property tax commission.

City officials familiar with the Dinkins commission indicated that many of the recommendations they made are still relevant today, but added that there was a significant lag between the release of the commission’s proposals and the implementation of these recommendations. The Cooperative and Condominium abatement program, for instance, was not implemented until 1997, four years after the commission was established, and well after Dinkins had lost re-election to Rudy Giuliani, who was reportedly less than enthused about the commission’s findings.

In addition to the tax reform proposals, the budget response document also calls for a unified development budget report. The proposed report would expand the scope of the annual public reports issued by the city’s Economic Development Corporation detailing development projects to include every economic and housing development project subsidized by the city and its contracting partners, and provide “real evaluative analysis” about the effectiveness of the various subsidies these projects receive. 

Mark-Viverito indicated there is no firm timetable for the commission releasing its finding. A spokesman for Mark-Viverito added that the commission would be established some time in the “near future.” 

Nick Powell