Residents and businesses located in the city of New York may soon see an end to their rapidly rising property tax rates, thanks to a bill that recently passed the New York State Senate.
The bill, which passed out of the state senate in late January, would create a property tax cap for New York City businesses and residents, matching a similar cap that was put in place in 2011 for areas outside NYC.
According to a release from the New York State Senate, state lawmakers say this limits future tax increases to “provide real savings to taxpayers that would create jobs by lowering the cost of doing business, encourage affordable and supportive housing construction, and give more financial security to small businesses and residents on fixed incomes.”
According to a release from the New York State Senate, the bill places a cap on the growth of property taxes at 2% or the Consumer Price Index, whichever is less.
The Senate release stated that this is consistent with the property tax cap in all other regions of the state that was enacted in 2011 due to Senate Republican efforts to reduce New Yorkers’ tax burden.
The Senate release stated that without a property tax cap in place, the NYC’s property tax levy increased 7.7% in 2014.
“Property taxes increased by 6.3% the last two years, and conservative estimates see them further increasing by an average of over 6% each of the next three years,” the release states.
“If the city started holding itself to a property tax cap starting in 2014, City taxpayers would have saved $432 million in the 2015 fiscal year, with the cumulative savings growing to $2.4 billion in the current year,” the release continues.
If the bill is enacted, the Senate release states that current financial forecasts predict the tax savings from a cap would grow to $4.5 billion in 2019, with New York City’s residential taxpayers facing a total of $1 billion more in taxes than what they currently pay, which equates to an average property tax increase of $1,000 per year.
NYC businesses face an increased tax burden of $3.5 billion more than what they pay right now.
“The 2% property tax cap has been a tremendous success and is helping us create new and better jobs by bringing certainty to businesses and taxpayers - except in New York City,” Senate Majority Leader John Flanagan said. “By passing this legislation now, we will ensure that this important measure is included in this year's budget discussions.”
The bill’s sponsor, Senator Andrew Lanza, said that the cost of living for middle-class homeowners is “too high” because of property taxes and other taxes and fees.
“The five boroughs are tapped out,” Lanza said. “This legislation will put an end to out of control tax increases that are being forced upon us. New York City government needs to live within its means in the same way families are forced to do.”
While the bill has passed out of the Senate, its likelihood of being enacted appears slight, at least in the eyes of New York City Mayor Bill de Blasio, who called the property tax cap a “non-starter.”
The New York Daily News has a recap of de Blasio’s reaction to the passage of the property tax bill.
From the Daily News:
"Honestly, it's a non-starter," de Blasio said of imposing the 2% cap on tax levies, which other municipalities in the state are forced to abide by, on the city. "That cap would be very dangerous for New York City."
The Daily News report also goes on to throw another wet blanket on the property tax cap, stating: “A measure to force the city to adopt the cap has passed the state Senate, but has virtually no chance in the Democrat-dominated Assembly.”
(h/t Christopher Whalen)