Published: Summer 1996
VICTORY ON PROPERTY TAX REFORM
Legislation Provides Abatements & Requires Permanent Plan
Overwhelming recognition of the unfair tax burden placed on homeowners
in cooperatives and condominiums has produced legislation
that begins to redress this inequity. Even as they faced severe
budget austerity, both the city and the state acknowledged
the urgent need for progress towards tax fairness. Thus, on
Tuesday, July 2, 1996, Governor Pataki signed into law State
Assembly bill A10588-A and
State Senate bill S6628-A mandating
property tax abatements for homeowners in cooperatives and
condominiums for fiscal years 1997, 1998 and 1999, and requiring
the City of New York to devise a plan for long-term tax equity
by the end of this calendar year.
In early August, the city's Department of Finance sent forms to all New
York City cooperative and condominium buildings to identify the homeowners
entitled to this abatement. These forms must be filed by October 15, 1996,
to qualify for the first abatement, which will appear as a credit on July
1997 tax bills.
For six years, the Action Committee for Reasonable Real Estate Taxes
has crusaded for fair and equitable property taxes for all
New York taxpayers. Since 1993, when Mayor Dinkins' commission
on property tax reform concluded that very real inequities
do indeed exist in the present tax structure, support for
tax reform has been growing. Mayor Giuliani twice presented
executive budgets with funds earmarked for property tax abatements
for homeowners in cooperatives and condominiums. The City
Council has been staunch and vigorous in support of this concept,
insisting this year that tax reform remain a top priority.
When it became clear that very limited funds could be made
available at this time, it was agreed that no more than a
modest $8.5 million could be used to reduce 1997 taxes. But
this grows to $70 million in fiscal 1998 and $120 million
in 1999. Equally important is the requirement of a long-range
plan to continue to resolve the tax inequities.
CITY LEADERS GUIDE TAX REFORM INTO LAW
On Wednesday, June 11th, based on priorities set by Speaker Peter Vallone
and in agreement with Mayor Giuliani, the City Council voted
to send the cooperative and condominium tax reform legislation
to Albany in the city's Home Rule Message. On Thursday, Assemblyman
Pete Grannis orchestrated unanimous passage by the Assembly.
Opposition suddenly appeared as the legislation moved to the
Senate. But, thanks to the strong support of Council Speaker
Vallone, backed by members of the City Council and the Council
Finance Division, Senator Goodman was able to secure passage
on Friday, June 14th, and the bill joined many others on the
Governor's desk. A July 8th press release confirmed that the
bill had been signed. The provisions of the legislation are
summarized in the chart on the right.
TAX REFORM EFFORT CONTINUES
With this law in place, the first stage of the efforts of the Action
Committee for Reasonable Real Estate Taxes to bring tax fairness
to this city has been successful. But much work remains.
FILE TO QUALIFY FOR THE ABATEMENTS
The first step is to insure that every building registers to benefit
from the abatements. The Action Committee hosted a series
of meetings on August 20th and 21st where Finance Commissioner
Alfred Cerullo III and members of his staff fielded questions
about the data collection forms. The Commissioner announced
that he was extending the filing deadline to October 15, 1996,
and that electronic filings will be permitted if they follow
the specifications available from the Department of Finance
(DOF). Furthermore, for the 1996-1997 fiscal year DOF is not
requiring that details about all information be included at
this time. Basic data about the building must be provided
on one general form, and then for each unit. The city needs
each unit owner's name, address, social security number and
number of shares held. These forms must be filed by the building
(not the individual homeowner). Forms have been sent to every
cooperative corporation and condominium association by the
DOF. Additional copies can be obtained from borough offices
of the DOF or by calling TAX FAX from a telephone connected
to a fax machine. Dial (718) 935-6114 and follow instructions.
When asked for the code, respond 371 for condominium forms
and 372 for cooperatives. DOF will use the information it
receives on these forms to provide a tax credit for fiscal
1997 for all eligible buildings on their July 1997 tax bills.
The filing deadline to be eligible in fiscal 1998 is April
1, 1997. Buildings that presented completed filings this fall
will simply have to confirm that there have been no changes,
or present data on the few apartments that change hands in
the interval. Buildings that presented partial data in October
must complete their filings by April 1, 1997.
ACTION COMMITTEE TO MONITOR PLAN
As the city undertakes the difficult task of developing and implementing
the long-term solution to tax equity, the Action Committee will do its
best to insure that this plan addresses the needs of all New York taxpayers.
Once developed, this plan will have to be endorsed by appropriate parties
and enacted into law. The Action Committee will count on the continuing
support of its members to help make this happen. Every cooperator or condominium
unit owner who wrote letters or made calls to government representatives,
or attended Action Committee meetings, helped pave the way for tax reform.
Your continued support will be most appreciated. Contributions can be
sent to the Action Committee, 250 West 57th Street, New York, NY 10019.