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Dinkins: ok, but with conditions.

Dinkins: OK, but with conditions

Prospects are good for a property tax freeze for the next four years, but there are some strings attached.

Mayor David N. Dinkins is expected, in his four-year budget balancing plan due out this week, to halt property tax increases for the next two years and maybe four years, depending on whether or not he gets the okay of the City Council and the New York State legislature for a number of new fees for garbage collection or bridge maintenance.

"It is probably the most important thing the mayor can do along with the City Council," said Steven Spinola, president of the Real Estate Board of New York.

The tentative plan, according to mayoral aids, also includes deleting 25,000 jobs over the next four years, and hinges on getting nearly $1 billion in aid from New York State taking over Medicaid costs. There would be no change in the mayor's plan for additional police officers, but the city employees' wages may be frozen beyond June of 1992 as was previously specified. There are also some initiatives for maximizing worker efficiency.

There is some concern, Spinola said, that the freeze is tied to so many conditions, such as the waste management and the tolls on the bridges. "What needs to be said is that there is a freeze, period," he said.

The news that the mayor is leaning toward a tax freeze is, according to John J. Gilbert, president of the Rent Stabilization Association (RSA) "probably the most positive statement that's emanated from City Hall since he (Dinkins) was elected...It really gives property owners some hope.'

Gilbert said the "strings" attached do, however, require some examination.

The tax freeze, Spinola said, will not call off the law suit being waged against the city and state by Taxpayers for an Affordable New York. The suit charges that the formula used by the city is unconstitutional. The purpose of the suit, said Spinola, was not only to elicit an immediate result, but to have a long-term effect on the city's policy, which, he says, uses a formula that is "inaccurate and wrong."

The tax freeze will, however, he said, send the message "That somehow we're going to hold the line on the cost of doing business in New York."

Peter Vallone, the speaker of the City Council, has already said the council will stand fast against giving the mayor any additional increases. In an address to the Midtown Realty Association last week, Vallone said, they already gave the mayor a considerable increase this year $400 million, which was only half of what they mayor wanted to impose.

"Don't come back," he said. "There will be no further real estate tax hikes.

"If we can give you that certainty...You're not going to be able to get that certainty in Connecticut or New Jersey."

Felix Rohatyn, chairman of the Municipal Assistance Corporation, also recommends a two-year tax freeze, and he said it is a condition, among others, on which he may provide a $1 billion aid package.

The city faces $1 billion budget gaps for the next three years, and as high as $250 million for the current year that ends on June 30.
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Title Annotation:New York City Mayor David Dinkins oks property tax freeze
Publication:Real Estate Weekly
Date:Nov 6, 1991
Words:537
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