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Finance chief: 'speak up Class II'.

"Squeal like stuck pigs," New York City Finance Commissioner Carol O'Cleireacain advised a gathering of coop representatives. She suggested this as a way to convince legislators to enact a property tax reform package to a meeting of the Action Committee For Reasonable Real Estate Taxes held under the auspices of the Council of New York Cooperatives.

O'Cleirecain took the opportunity to announce that she is suing the state over last year's tax rate adjustments and that the mayor is introducing legislation to exempt certain co-op sales from the mortgage recording tax.

The city will file a lawsuit this month against the State Board of Equalization and Assessment (SBEA), O'Cleireacain said, in an attempt to correct the problems associated with last year's market survey. That survey, relying on data two to three years old, would have caused taxes to rise over 8 percent for Class II multiple dwellings when adjustments were made to all the class shares, if the State legislature and the City Council had not intervened. The SBEA survey will still be capturing a rise in values in its next report, she warned.

O'Cleireacain also announced that Councilmember Herb Berman would introduce legislation last week at the request of the mayor to exempt certain forced transfers - such as those made from defaulting sponsors - from transfer taxes. This was brought to the city's attention by Queens Borough President Claire Shulman.

In a speech punctuated by pleas for help to remove the inequities of the tax system, O'Cleireacain said she was grateful the individual legislators now admit there are inequities in the system, a job, she said, that took her three years to accomplish.

Without going into specifics, she explained her tax reform package as one that would create two classes: A residential group and a separate group that would combine industrial, commercial and utility properties.

At the present time there are four properties: single family homes; multi-family residential; utilityowned property and a class made up of other commercial properties. These classes are taxed at different rates and several protected residential sub-classes have differing caps on assessment rises.

Mary Ann Rothman, executive director of the Council of New York Cooperatives said she hoped the reform package would be open soon to scrutiny and commentary. She is delighted O'Cleirecain is filing the lawsuit.

"I cannot fathom where the SBEA figures came from," she added.

Among the Action Committee's objectives are removal of caps on classes, elimination of transitional assessments and an equitable tax share division among the classes.

The commissioner's special assistant, Martha E. Stark, said combining the classes now would raise the Class 4 commercial tax rate .006 cents from today's 10.698, "a small price to pay for reform."

O'Cleireacain said any enacted reform package would take at least a decade to implement and phase-in the expected rise in rates to Class I properties. Experts agree the homeowners are not paying their fair share and the decade would provide enough time for both owners and the sales market to adjust, she said.

Any reform legislation, she said, would include a circuit breaker to cap property tax rises for those who are paying too much of their income toward property taxes. At this time, some relief is granted on a scaled basis if an elderly homeowner's income is less than $19,800, something O'Cleireacain deemed not effective. She mentioned the complaint of the Federation of New York Housing Cooperatives' President Charles Rappaport's that elderly and impoverished cooperators are overlooked at the same time condominium, homeowners and even low-income renters are aided through different programs.

The commissioner said changes have been made in the way the Department of Finance conducts its annual review of property tax assessments. The assessors have been reorganized, she said, and are no longer limited to serving a geographic area. They will also concentrate on specific property types enabling them to "delve into problems."

For the most part, she said later, the assessors seemed to be invigorated and liked the change, and O'Cleireacain alluded to this as way of keeping them from becoming too ingrained in any one area.

The commissioner said the new assessor guidelines reflect new refinements in the delineation of cap rates. For the most part, these new cap rates are higher - and that means lower assessments - but as the Community Housing Improvement Program's (CHIP) executive director Dan Margulies pointed out, they might not go high enough for some properties.

While O'Cleireacain congratulated the 2-10 Unit Owners, - a group of small co-op owners - for their legislative victory in being placed into the protected Class I, she said, "I don't find sheltering any kind of property at another property's expense a reform."

One of the major obstacles to property tax reform, she advised, is the legislators' reluctance to admit they represent Class II taxpayers. To a person, she said they think in terms of homeowners because they never hear from Class H when there is an issue before the legislature.

"'My Class I people scream like stuck pigs on every issue and they get to me,"' said O'Cleirecain as she recalled their explanation. "They're counting noisy voters, the people they hear from. "My plea to you is to organize and squeal like stuck pigs and make them hear you," she implored the Class II representatives.
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Title Annotation:New York City Finance Commissioner Carol O'Cleireacain advocates property tax reform package related to Class II multiple dwellings
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Oct 14, 1992
Previous Article:Despite low interest rates, some co-ops can't refinance.
Next Article:Escrow bill introduced.

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