Printer Friendly

Council shows its muscle; RE taxes hiked, but Dinkins plan slashed.

Council shows its muscle

RE taxes hiked, but Dinkins plan slashed

There were sighs of relief, cheers of victory and some grumbling last week when Mayor Dinkins and the New York City Council reached a budget accord that included $400 million in property tax increases -- half of what the mayor had proposed.

There was overwhelming praise, however, for the City Council, which stayed close, at least, to its pledge of no more than $300 million in new taxes. Realtors said the Council showed it is a "major player" and is responsive to taxpayers. The council was also hailed for saving vital services and cutting middle-management excess.

Owners and realtors also gave credit to their own lobbying efforts through the grass-roots organization Taxpayers for an Affordable New York.

The property tax rise, however, coupled with assessment increases, may still leave property owners feeling that their pockets have been picked.

The $28.7 billion budget also included a jump in personal income tax.

"We were able to cut the Dinkins proposal in half," Rent Stabilization Association president, John J. Gilbert III said, "but the bad news is that 50 percent of something that large is still a big, big number. This industry should not be lulled into believing that this will not be painful. These will be difficult taxes to pay in this economy."

Gilbert said there is still $389 million in delinquent property taxes from this past year, in addition to the 229 from the year before. "So in the last two years you have nearly $600 million in property taxes being levied and uncollected," he said. Gilbert said that translates into at least 35,000 apartments which are two years or more in arrears on taxes.

Steven Spinola, president of the Real Estate Board of New York said, "It's tough to say you're pleased when you have a $400 million increase, but when you had an $800 million increase, in these difficult times it's more than a fair compromise." The Council's cutting of the proposal, he said, is "clearly a positive sign and shows how the Council heard the taxpayers of the city who responded overwhelmingly to protest the increase."

The Council, he said, indicated it is a "major player" and deserve credit for restoring the Central Park Zoo and keeping the lights on and other essential services. They recognized, Spinola said, that where the cuts should be made was not in the area of essential services but in the middle-management agencies which were not providing essential services.

"In the end," he said, "everybody is going to be paying and we hope to see some concessions from the unions. They have made no concessions as of now, to reduce the service cuts anymore."

"It's not a great budget for anybody," Spinola said, "but it ended up being a fair budget."

Irwin Gumley, president of the Apartment Owners Association and Gumley-Haft, Inc., agreed there will be marginal situations, particularly in the rent control and rent stabilization sector, which will be abandoned.

"The raise is too much," Gumley said. "It's more than we would have liked to have and it's going to have an adverse affect on values."

Additionally, he noted, individuals who are in trouble or who are mortgaged out, will be in further trouble. "There will be numbers of apartment owners who will try to sell and it will throw more apartments on the market," he added. Gumley said maintenance will rise and people will begin to compare the costs of living elsewhere.

"It makes no difference that the money is going to a good cause," Gumley said. "They've done what they can do. The deal is made for this time around."

Mary Ann Rothman, executive director of the Council of New York Cooperatives, said, "I am absolutely proud of the City Council for the way it's taken the reins in hand on its new role. Although I don't like the idea of more income tax, it's a much more fair way of raising the funds because at least it's based on the ability to pay."

The property tax rise, Rothman said, will affect Manhattan co-ops much more than the outer boroughs, since, she noted, assessed valuations average twice as much in Manhattan. "But on balance, a fair and admirable job has been done," he said.

Council Speaker Peter S. Vallone, in an upbeat mood, said "We're glad that we could keep this to less than half of what the Mayor proposed and we will continue to hold the line in future years because maintaining the tax base and keeping individuals and businesses in this city is our prime concern."

The new rates are Class I homeowners, $10.888; Class II apartments $9.885; Class III utilities, $13.083; Class IV commercial $10.631.

Bills began going out to the largest property owners beginning Tuesday, July 2. According to finance officials, if you pay directly and you are the owner of the property and the assessment is under $40,000, the bill will be due on July 23. If the assessment is over $40,000, or it is paid by escrow, the bill is due on July 16.

Late payments will be charged interest at a lower rate than last year. If the annual tax is greater than $2,750, or vacant land or paid by escrow, the interest rate on late payments is 18 percent. If the payment is less than $2,750, then the interest is 9 percent (except for vacant land and escrow payments which are charged 18 percent.)

Property owners should also be watching the mail during July for the Real Property Income and Expense forms, which must be filed, in order to preserve the right to an assessment review at Tax Commission and to avoid monetary penalties.
COPYRIGHT 1991 Hagedorn Publication
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:New York City Council, real estate, Mayor David Dinkins
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Jul 10, 1991
Previous Article:Weatherall Green & Smith expands.
Next Article:Office ads: price only one part of the story.

Related Articles
Experts predict doom if Dinkins' taxes pass.
Steve Spinola: 'time to lead the leaders.' (Tax Front)
Economic climate gives birth to ideas.
Property taxes 'unconstitutional.' (lawsuit contention)
Dinkins: ok, but with conditions.
Tax freeze? It all depends.
NYC facing tax rate quandary.
Dinkins names tax reform panel.
Dinkins: Rudy's tax plan doesn't add up.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters