The Action Committee for Reasonable Real Estate Taxes was formed in early 1990 to seek an equitable property tax structure for New York City. At the time, we were told that resolving the tax inequity problem was impossible. Thirteen years later, homeowners in New York City cooperatives and condominiums still pay more than their fair share of property taxes. However, considerable progress has been made. Since fiscal 1996, a twice-extended program of property tax abatements for homeowners in New York City cooperatives has provided a billion dollars of tax relief through 17.5% abatements of taxes on buildings where assessments average $15,000 or more per apartment, and 25% abatements on buildings with lower assessed values. The abatement program will remain in force through June 30, 2004. And the crusade continues. Following are excerpts of Chairman Martin Karp’s report to the January 28, 2002, meeting of the Action Committee.

TAX REFORM: THE PROCESS
Changes in Real Property Tax policy require a city recommendation followed by legislative action in Albany. To obtain movement on the plan to eliminate the continuing tax inequity, we have had to restart the strategic effort with a new Mayor, a new Commissioner of Finance, and a markedly changed City Council.

In the City Council, Speaker Gifford Miller is very familiar with and supportive of tax fairness issues. We are confident that he will continue strong Council support of tax equity concepts. At his invitation, CNYC and the Action Committee have conducted a briefing session for Council members and their housing staffs on key co-op and condo issues, including tax equity.

In the Spring of 2002, Mayor Bloomberg appointed Martha E. Stark, Esq. as the Finance Commissioner. The Action Committee had direct contact with Commissioner Stark when she was a special assistant to the Finance Commissioner in the Dinkins administration. We were able to meet with her and have a frank and constructive discussion soon after she took office. However, Commissioner Stark had more pressing priorities to deal with, including reforming the assessment process and implementing required budget reductions within the Finance Department. There is no indication yet of how the Department of Finance now proposes to address the long-term co-op and condo tax inequity.

Late in 2002, the Mayor began talking about a 25 % real property tax rate increase. Believing that some tax increase was inevitable, The Action Committee did not to join efforts to oppose any tax increase. The property tax is virtually the only significant revenue source that the city can change without New York State approval. Late in 2002, the Mayor and the City Council agreed upon an 18.5% increase in the city's overall property tax rate, which had been stable for the previous dozen years.

Mayor Bloomberg’s State of the City address showed sensitivity to the impact of the real estate tax increase. When he presented his plan for fiscal year 2004 on January 28th, he clearly identified the revenue and expense issues that must be addressed to meet a legally required balanced budget. Nowhere did he suggest any changes in the current tax abatements for homeowners in cooperatives and condominiums, which will remain in effect through June 30, 2004.

Looking to the future, we need to push for a long-term plan for several reasons:

While we would like to see progress on tax reform, it would be pointless to press for further action until the city moves out of crisis mode. Instead, we will continue our research (see Survey information below). Our professional representatives continue to monitor the situation in New York City and Albany. With their guidance, we will find the right moment to extend the abatement program, while we continue to push for a long-term plan.

PRICE SURVEY
The Action Committee undertook a Selling Price Survey to update the basis for discussion when consideration of a long-term plan resurfaces. Questionnaires were sent to all Action Committee members, and to members of the Council of New York Cooperatives & Condominiums and the Federation of New York Housing Cooperatives, asking that they (or their managing agents) furnish this data to help the Action Committee. The response to our request was disappointing. A repeat request will soon be sent to buildings that did not previously respond. Please take the time to provide the information requested, so that the Action Committee can further the cause of tax fairness.

HELP FUND THE ACTION COMMITTEE
We close with thanks to the individuals and the cooperatives and condominiums that have made contributions to the Action Committee. This money is used to retain our very effective professional support in NYC and Albany and to fund Action Committee activities. Without your support, we could not have come this far; your continuing support will help us achieve long-term tax fairness.