FRANKEL'S TESTIMONY

Verbatim excerpts from New York City Finance Commissioner David Frankel's May 2 testimony before the City Council's Finance Committee:

"When [the Department of] Finance issued the tentative assessment roll in January, we saw an unusual concentration of large market value increases for larger Queens co-ops in particular. Almost 30 percent of the larger Queens co-ops saw increases in market value of over 50 percent. To a lesser extent, other Class 2 properties [the class which includes co-op and condo properties] in the city also saw large increases in market value. We had concerns about this, and valid concerns were also raised by members of this council, other elected officials, and co-op boards and residents.

"In response, we did two things. First, we reviewed all Class 2 properties with a market value increase of greater than 50 percent and made revisions as appropriate. Second, we announced that all Class 2 market values would be increased no more than 50 percent. Because state law provides that market value increases are phased in at a standard 20 percent a year over five years, the 50 percent cap was intended to limit tax increases due to this year’s market value changes to 10 percent.

"However, given the history of significant [DOF] market value reductions for many of these properties over the past three years, the 50 percent cap did not have the intended impact on the property tax for half of the Queens co-ops as well as some other Class 2 properties. Today, we are announcing an additional remedial step for those Class 2 properties that do not have the 20 percent phase-in because their assessments were too low last year to trigger that protection. Market values increases will be limited to 10 percent for this group of Class 2 properties. This additional step will mean that tax increases due to this year’s market value changes for these properties will also be limited to a 10 percent increase.

"Taken together, these two actions will have the effect of limiting actual tax increases this year for Class 2 properties to about 10 percent, assuming stable tax rates."