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City tax roll down over $2 billion.

Figures released by the Department of Finance last week show that taxable assessments dropped $2.158 billionfrom last year's final roll. While the city's assessors in most cases unilaterally dropped assessments for the tentative roll that was released in January, the roll declined another $1.121 billion since then due to challenges to individual property tax assessments.

Taxes for fiscal year 1994 were based on the roll that was released last May with billable assessments of $78.177 billion, and that was $1.001 billion dollars less than the year before. The billable assessments for fiscal year 1995 are $76.019 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 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. Another $215 million is expected to be collected through the sale of tax receivables to Chemical Bank in a program that has not been fully explained by the administration.

Former Mayor David N. Dinkins had pledged to freeze the average tax rate which was 10.589 percent at the time for four years. Last year, the average tax rate even saw a slight drop to 10.37 percent. Mayor Rudolf Giuliani's proposed budget maintains that tax rate, although individual bills will shift along with adjustments to class shares and individual assessment changes.

The City Council is still discussing the final tax rates and may propose a bill in Albany to dispense with the State Board of Equalization and Assessment (SBEA) data.

Steven Spinola, president of the Real Estate Board of New York (REBNY), expects the Mayor to maintain that pledge. "The commitments that have been made are that the rates won't go up. I don't believe the administration can play with the rates."

A memo released to REW by the SBEA lays out the equalization rates and class ratios that the board will vote on this Wednesday, after having considered challenges by New York City.

According to Deputy Director Robert T. Kitchen, these numbers are accurate based upon the SBEA's 1993 market value survey. "We reviewed the complaint made by the city and made adjustments," he said, adding that the litigation for 1991 and 1992 is over the class ratios and not the equalization rates.

The recommended 1993 final rate is 24.84, up from 22.48 in 1992. Class equalization rates are Class I, 6.48; Class II 34.55 up from 32.50 in 1992; Class III, 48.26; and Class IV 37.22 up from 30.99 in 1992.

Recommended class ratios are Class I 6.89 up from 5.24 last year; Class II 38.00; Class III 48.26 and Class IV 38.30 up from 33.44 last year.

These rates will be used to set Class shares or "piece of the pie" used to determine how much of the levy will be paid by each class and the tax rates for each class. Based on the SBEA figures, the class share would go down for Class IV's office buildings.

Spinola acknowledged there is discussion underway in the Council and with the administration to try to protect Class I's one to three-family homeowners and Class II from increases in the class shares and equalization rates.

"The group that would be hurt by such a proposal are the office buildings," he said, "so we are watching that and while we would like to see the help to Class II, I don't know why you have to help the Class I's," he added, referring to the preferential treatment they have been given over the last 14 years in holding down taxes.

"We can't have all the savings that would apply to the offices that need the help be taken away for the politically correct thing to do to help the homeowners," Spinolascoffed." For the first time, the office market has seen not insignificant decreases [in assessments and class shares] and for them to disappera would be wrong."
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Title Annotation:New York City
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Jun 1, 1994
Words:741
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