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Goodman tax reform bill condemned by REBNY.

The Real Estate Board of New York condemned the property tax reform measure introduced in the State Senate by Senator Roy Goodman of Manhattan.

The bill, which lumps all residential property together and designates commercial and utility property separately, also gives municipalities of more than 1 million in population the ability to set rates by property type.

The bill, Goodman's accompanying memorandum explains, is an attempt to create order out of what he calls a "complicated and inaccessible morass." The memo says the bill would eliminate the manipulation of assessments and enact a simple five-step procedure for levying the property tax.

Goodman's bill is primarily designed to correct the disparity between Class I, which has an effective tax rate of .68 percent of market value, and Class II which has tax rates approximately 3.49 percent of market value, according to his figures.

Charles Rappaport, president of the Federation of New York Housing Cooperatives, believes the measure is a move in the right direction. He agrees with Finance Commissioner Carol O'Cleireacains's notion that why should properties stacked vertically be assessed and treated differently than those living horizontally?

Meanwhile, the fate of New York city's own property tax reform proposal remains "on the Mayor's desk." The plan, developed by Department of Finance Commissioner Carol O'Cleireacain and Special Assistant for Property Tax Reform Martha E. Stark was written after more than six months of meetings with real estate industry and community representatives.

That bill, sources say, was designed also to smooth out inequities in the system but O'Cleireacain admitted at a Brooklyn Chamber of Commerce luncheon that it would have caused a rise in taxes for Class I. These small home-owners have been underassessed for many years because of a shifting of tax burdens onto primarily Class IV commercial properties.

In recent Levitt commission report, called "Platforms For Growth," those business and industry leaders specifically mentioned the heavy burden commercial owners pay relative to residential property. They also cited the disparity between New York City's property tax rate on commercial property and that of other cities in the region and across the nation saying it needs to be changed for businesses both to remain and be attracted to the City.

Goodman's proposal would not address any of those inequities and indeed cites no fiscal implications in the memorandum.

"It's a terrible piece of legislation," said Steven Spinola, president of the Real Estate Board of New York.

"It gives the city the ability to play games again with the fair share of taxes and allows the local municipalities to protect property groups." Spinola explained this was finally stopped within the current laws by eliminating the 5 percent discretion to shift the burden from Class I.

"This (bill)] is much worse than that," he said. This bill would the worsen the burden of the commercial property taxes, he explained. This is a bill, he said, which would allow a municipality to protect one class over another. It allows the city, he said, to make decisions without facts or statistics, as to what portion of the taxes will be borne by each property type.

Jeffrey Golkin, chairman of the Bar Association of the City of New York Committee on Condemnation and Certiorari, and a partner with Herzfeld & Rubin, said "The status quo is unacceptable and is in dire need of reform. This seems to be an attempt by Roy Goodman to address the inequities between Classes I and II." While the protective caps on rises in assessment each year has to end, Golkin said and if the bill gives too much discretion and creates inequities, "That is a weakness and is what we have now."

Golkin said he would agree with the Real Estate Board that the law should be above the political inequities. He added, "People should pay their fair share."

"We have serious problems with the current system but at least the city has to keep somewhat fair values among the current classes," Spinola said, adding, "This bill gets the Bronx cheer."
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Title Annotation:Real Estate Board of New York oppose property tax measure proposed by Senator Roy Goodman of Manhattan
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:May 20, 1992
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