Dinkins: Rudy's tax plan doesn't add up.

Calling the inequities between the property tax classes a "valid" observation, Mayor David Dinkins said last week that he and City Council Speaker Peter Vallone will soon announce the members of a public/private panel organized to address property tax reform.

"If we go to Albany together -- the City Council and the executive branch -- and say this is what we propose, we have a far greater chance of succeeding," he said.

Following a meeting with mayoral challenger Rudolph Giuliani (REW, Sept. 1), editors of Real Estate Weekly and other Hagedorn Communications newspaper paid a visit to the mayor last week to discuss with him taxes, housing and the campaign.

Claiming that sanitation and services to the aged would have to be cut, Dinkins last week criticized Rudolph Giuliani's pledge to slash taxes as "arithmetically" flawed.

Giuliani pledges, via attrition, to trim 35,000 workers from the municipal ranks, but, notes Dinkins,he has excluded cuts to police, fireman, programs for children, art and culture, parks and recreation and any mandated employees (Giuliani told REW he would increase the salary of teachers while paring down the administrative staffs).

The commercial rent tax, which Giuliani says he will eliminate in four to six years, according to the mayor brings in $700 million in revenue.

"One cannot simply say |Let's get rid of this tax or that tax without first showing what you are going to use to replace the revenues ... ," said Dinkins.

Dinkins acknowledged that he proposed reducing the commercial rent tax for 28,000 small businesses -- at a total of $30 million -- in January, but in his administrative budget he could only "afford " to reduce the tax by 25 percent for 11,000 small businesses.

"We are mindful of moving in that direction," he said.

Dinkins boasted of having already frozen property taxes and water and sewer rates.

On the 20.25 percent hotel tax, the mayor said he "invites Giuliani" to fight the 5 percent state-imposed tax.

On Housing and |Fair Share'

Pursuant to the Cuomo report, Dinkins said they are phasing out the Emergency Assistance Units (EAU), which usually served families from midnight to 8:00 a.m., and creating assessment units that will operate during the day and be able to determine needs better.

While Giuliani criticized the "fair share" program for locating homeless housing as a vehicle to "bring down every neighborhood", the mayor vowed:

"There have to be facilities for homeless people in neighborhoods where some people are not going to like them." he said.

Giuliani suggested exploring "mixed-use" or industrial areas. Dinkins says these individuals must learn to live in neighborhoods.

On Rent Regulation

Dinkins said he would not support luxury decontrol until the vacancy rate goes down. The number of wealthy individuals or "stars" living in rent-regulated apartments, he said, is very small.

When asked how he could be certain of that without any income verification rules, Dinkins replied: "You don't know that precisely, but those on the other side of the argument can't establish that either.