Posted on 10/18/2002 9:10:55 AM PDT by Tumbleweed_Connection
Momentum is building in the City Council for a $1 billion property tax increase this year, half a dozen council members said yesterday. While it is too early to tell how big any increase would be, a growing number of lawmakers have resigned themselves to the fact that higher property taxes will be in the mix of revenue raisers in the new budget.
The idea of raising property taxes isn’t new. Council members privately discussed boosting them last year at a time when the mayor was publicly opposing such tax increases, according to three lawmakers.
At the time, they decided Mayor Bloomberg’s opposition to such an increase made it a non-starter. The landscape has since shifted as the Bloomberg administration is openly exploring whether an increase of 10% or 20% should be part of the budget proposal they will unveil next month.
“It is too early to tell whether a property tax will actually happen, but there is no question that I’m concerned about the momentum that seems to be building,” said Council Member Peter Vallone Jr., a Queens Democrat. “All the so-called painless cuts have been made.”
Council Member James Oddo, a Staten Island Republican who stood against property tax increases last year, said they will be part of the next budget.
“If you do the math, I don’t know how you close that gap without serious cuts and the specter of increased property taxes,” he said. “There are people on the council who think property taxes are too low. I’m not one of them. But the reality of the situation is that property taxes are probably going up and it is going to push people out of New York City.”
The growing sense of inevitability surrounding some sort of tax increase comes as City Hall searches for ways to cover a $5 billion budget deficit. A 10% property tax rate increase would take them a long way there, raising $1 billion.
Bloomberg administration officials say the budget staff is crunching numbers on how much a 20% tax increase would raise.
The property tax rate in New York hasn’t increased since 1992.
A 10% increase would add about $200 to the average homeowner’s annual property tax bill and would add about $1 per square foot to commercial property costs.
Mr. Bloomberg declined to attach a figure to a possible increase.
“Nobody’s remotely sat down and said, this is the percentage of the property tax that should go up,” he told reporters yesterday, adding that everything — from program cuts to tax increases — are on the table.
“One tax is up to the council, that is the property tax. And all of the other taxes the city need the cooperation of Albany. They need to pass a law to let us implement the tax and collect it.”
Administration officials and council members have been reluctant to talk about taxes until after the November elections. Increasingly, though, as politicians scour the books looking for savings, property taxes have become a tempting way to get out of a tough fix.
Mr. Bloomberg and Mr. Vallone discussed the property tax increase when the two were traveling in Greece last month.
“We were discussing ways to cut the deficit and the mayor mentioned one of the last resorts would be property tax increases,” Mr. Vallone said. “Hearing that from him concerned me because he’d been against it in the past. We didn’t talk numbers or specifics.”
Economists say the property tax increase will hurt the New York City economy. A $2 billion increase could cost up to 100,000 jobs and force some New Yorkers to move out of the city.
“We are the highest taxed major city in the country,” Mr. Bloomberg said.
“I think everyone agrees that taxes are a disincentive to economic activity…Taxes are one of the necessary evils, however, and the question is, purely, at what level and which taxes?”
Meanwhile, The Crain’s Insider quoted budget analysts saying the city faces a gap of about $700 million this fiscal year.
The analysts said the number could grow if the city’s riskier budget assumptions don’t pan out.
One expert told the newsletter revenue estimates could be $350 million below expectations.
Because of market volatility, city officials also have postponed an $850 million bond sale set for this week.
Uh huh.
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