Property taxes need tinkering, again.

The rising residential market coming after a stagnant period could force another Albany showdown to pare the taxes of residential property owners. And rather than a large break for commercial properties, they may once again absorb some of the residential overages. The Real Estate Board will be lobbying against any temporary bill that shifts tax burden to the commercial properties.

Right now, taxes are expected to rise 5 percent for Class I, II and III: the small homeowners, the multi-family residential properties and the utilities. But the commercial properties, Class IV, may be looking at an 11.7 percent decrease.

The state's Board of Real Property Services (BRPS) has not yet finalized its class equalization ratios that are used to project class shares, the amount of the "pie" that each tax class must contribute to city coffers.

Because of pending challenges, sources say, those numbers may not be finalized even in June. At this juncture in fact, the City Council is considering using last year's final numbers rather than base the taxes on tentative rates. The tentative 1994 ratios are: Class I 7.00 percent; Class II 36.89 percent; Class III 46.08 percent; and Class IV, 42.15 percent. The final 1993 class ratios are: Class I 6.48 percent; Class II 35.24 percent; Class III 48.26 percent; and Class IV 38.21 percent.

According to BRPS counsel Robert L. Beebee, it would not be legal for the City Council to use last year's class equalization rates to compute city tax rates. Tile, board expects to vote on the final rates after June 8th. 'The city filed a rate complaint and we're working resolve it, ' said a spokesperson.

Meanwhile, 58 people are gone from the former SBEA including Executive Director David Gaskell, who retired in January, while others have been demoted and others took the early retirement package. Former city Finance head Stanley Grayson also resigned from the Board at that time. "A lot of institutional memory has been lost," said one insider. "We're still waiting for the other shoe to drop."

The final roll as released last week does not show much of a decrease for Class I's and II's as most assessment protests have not yet been heard. The properties assessed over $20 million are primarily non-residential, so there were some changes downward there, including some Change By Notices generated for the Downtown area.

The real estate community is still digesting the changes and implications of the ongoing process that should result in a tax rate being set sometime, hopefully, before July 1st. If the Albany legislature gets involved, it could go on for part of the Summer and like last year, the Council might have to reset rates in the mid-year, not a welcome prospect for anyone.

Mayor Rudolf Giuliani's change in budget strategy that put off the decrease in co-op and condominium taxes has also affected those owners.

Martin Karp, chair of the Action Committee For Reasonable Real Property Taxes, explained "This annual adjustment is the result of the existing inequitable real property tax law and simply underscores the need to take action on property tax reform as has been proposed and supported by Mayor Giuliani and Speaker Peter Vallone. Our proposal has been a revenue neutral tax reform of the entire system."

While the Dinkins administration had understood the need for large-scale reform, Giuliani has not made it a priority and in fact has ignored the Dinkins' task force reports, preferring to tinker with a decrease in the co-op assessments rather than understanding the need to reform the system.

"We went from thinking the Mayor and City Council would be getting us a decrease for the first time, and in the course of a month, we got an increase in real estate taxes and an increase in water and sewer charges,' said Mary Ann Rothman, executive director of the Council of New York Cooperatives.

Steve Miller, a partner with Dully & Miller, that manages co-op and rental buildings, agreed. "We hoped to get a break and it looks like it's going up instead. I understand the mayor's budget problems but I see the inequity, and that single-family homes pay much less than co-ops and condos. The taxes should be equitable. We may have to consider an increase [in maintenance] for next year just to cover the increase in costs,' he added.

Meantime, REBNY is gearing up for a fight to keep the decrease for the commercial owners. "The big question is who is going to propose that they change the cap from 5 percent to something else," wondered Steve Spinola, president of the Real Estate Board of New York. 'Class IV will already have taxes shifted to it," he noted since Class I, II and III are up slightly over the five percent. "We're watching out for such a bill and it's wrong every year to do this. We have a law to protect classes and it's set at five percent. If we do something, do it permanently."

The tentative billable assessments for fiscal year 1995 were $76.557 billion and the final roll released last week dropped that to $75.85 1 billion, a loss of .7 billion. A drop of $1 billion in assessments could cause a loss of more than $100 million in taxes based on an average tax rate of around 10 percent. The Mayor's proposed budget is expected to keep the average tax rate at 10.366 percent and projects a decrease in the levy as well as in collections for 1995.

The levy is decreasing by $214 million and the expected collections decreasing by $381 million, due to both delinquencies in collections and increasing refunds as tax certiorari cases mature.

While last year's levy was $8.113 billion with revenue estimated at $7.586 billion, the levy for fiscal year 1995 is expected to be $7.899 billion with collections totalling $7.205 billion.