- Lawmakers proposed an exchange: restore Medicaid cuts for a cap on property tax assessment growth. But de Blasio disagreed, citing possible limitations on NYC developments.
- Property tax caps are used throughout New York state, with New York City being the only exception.
- In 2012, New York had the highest state and local tax burden in the nation, further pressing the reason behind the tax cap laws.
- The Real Estate Board of New York stood behind the NYC property tax cap proposal after Tuesday’s hearing.
What began as a budget hearing on affordable housing turned into a heated, lengthy debate on Manhattan property taxes and beyond for Mayor Bill de Blasio and Senate Republicans last week.
During the legislative hearing, lawmakers proposed an exchange: restore Medicaid cuts for a cap on property tax assessment growth. But de Blasio disagreed, citing possible limitations on New York City developments due to lack of resources.
“Anything that would artificially limit our ability to gather resources would undermine all of our efforts,” de Blasio said to Senate members.
“The city’s property-tax system is seriously flawed. An improved system…would promote the creation and maintenance of rental housing,” said REBNY President John H. Banks III.
Property tax caps are used throughout New York state, with New York City being the only exception. Localities can override the cap at the local government level, so it’s no surprise lawmakers are making arguments to extend the law into NYC to help residents and landowners save money. In 2012, New York had the highest state and local tax burdens in the nation, further pressing the reason behind the tax cap laws. The law outlines that homeowners within localities maintaining the cap receive rebate checks each fall, making it a strong incentive for residents to support such legislation.
However, according to a recent report in the Poughkeepsie Journal, 26 percent of local governments voted to exceed the 2016 tax cap budget already, as revealed in records from the New York State Comptroller’s Office.
In Monroe County, Webster Town Supervisor Rob Nesbitt says the tax cap limits revenue to $254,000. Health care costs alone hit $300,000, so the Town Council decided to up the cap to 7.9 percent to make room for all-inclusive costs. Nesbitt said the town couldn’t cut out what they already had in order to hurt services to Webster residents.
While some communities already under the tax cap argue its drawbacks, many experts feel a cap in NYC wouldn’t reap positive consequences for the general population, since property taxes in the city are highest among commercial and luxury properties.
The tax cap discussion comes at an interesting time for real estate developers. The 421-a program, a tax break intended to increase development across the city, expired in January. Until a new agreement is reached and signed, developers struggle to build in the city without paying a higher rate.
According to The New York Post, property taxes in New York City are projected to increase by 5.8 percent over the next year starting July 1, reaching $23.8 billion.
