Property Tax Reform Commission Has Swung Into Action

After decades of false starts, New York City has taken its first baby step toward reforming its lopsided, unfair, and largely unloved system of property taxation. The Advisory Commission on Property Tax Reform, appointed by Mayor Bill de Blasio, began work this week on suggesting revenue-neutral reforms to a system that has been in place since 1996, Bloomberg reports. 

The commission’s report, due in a matter of months, is intended to guide officials in crafting legislative proposals to present to the city council and a newly elected state Legislature in 2019. The Legislature has the final say on any changes to the city system. 

Scrutiny of the city property tax’s fairness has been rising since an April 2017 lawsuit filed by Tax Equity Now New York (TENNY), an unlikely coalition of civil rights groups and real-estate interests. The lawsuit claimed that homeowners in less affluent neighborhoods have an unfair burden compared with single-family homes, condos, and co-ops in more affluent neighborhoods, and that valuation formulas are opaque. 

Property taxes, the city’s largest revenue source, will provide an estimated $26.4 billion in the current fiscal year, or 45 percent of total revenue, according to estimates by the city Independent Budget Office. Since that revenue is not going to be cut, any reform will ultimately result in winners and losers among taxpayers. 

Selling the recommendations to state legislators will require demonstrating “that this isn’t the same city” as when they last changed the law in 1996, commission member Carol O’Cleireacain said. The panel’s recommendations will have to reflect changes in development patterns, property values, and population shifts, she added, and stability and predictability are important property tax considerations for both the city and taxpayers. 

The panel will next meet Sept. 20 in a closed session on pending litigation, and will then proceed to public testimony sessions across the city’s five boroughs.