New Yorkers pay $28 billion in property taxes a year, which accounts for nearly one-third of the city’s revenue. Since that money is vital to maintaining the current level of city services, the push to reform the city’s property tax system is not likely to result in an overall tax reduction. Instead, it will produce winners, who pay less, and losers, who pay more, of the $28 billion.
Martha Stark, a former commissioner of the city’s Department of Finance, is the policy director of a group called Tax Equity Now New York (TENNY), an unlikely coalition of civil rights activists and real estate interests that has filed a lawsuit demanding reform of the city’s property tax system. Stark also happens to be a shareholder in a Park Slope co-op. Under reforms she favors, she could be among the big losers.
“Even those who are benefiting [from current tax inequities] don’t know it,” Stark said at a recent forum at NYU’s Wagner School, the New York Post reports. As a Park Slope resident, she includes herself among the beneficiaries. Stark also pointed to some of the co-ops that are being sold for $10 million to $50 million but pay on average $2,000 in taxes per million dollars of sales value. At the same time, homeowners in places near Canarsie and the Bronx may be paying $12,000 to $13,000 per million dollars of value.
Among the many reasons for this disparity: caps on annual tax increases, which favor homeowners in neighborhoods with rapidly rising values; an arcane system of assessing property values; and a method of computing tax bills based on an “equalization rate,” now 45 percent of assessed values for co-ops and condos.
Stark favors tax bills based on 100 percent of assessments. “One hundred percent is not as scary because then the [tax rate] comes down,” she explained. Under such a scheme, owners with more valuable homes in Park Slope – including Stark – would be the biggest losers in a property tax shift based on real sales values, with 98 percent of those paying a whopping $11,000 more. Owners of Staten Island’s less-valuable homes would come out the winners, with 97 percent of them paying less.
Meanwhile, the Advisory Commission on Property Tax Reform, appointed by Mayor Bill de Blasio, continues to hold public hearings. It is expected to make final recommendations in February, which will require action by the state legislature.
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