Punishing Property Owners

With the city facing a $4 billion budget gap over the next two years, New Yorkers are fortunate that we have a fiscally conservative mayor in City Hall, one who understands that an elected official’s responsibility is to make tough decisions rather than pass the buck—or lack of bucks—on to the next mayor. Indeed, we supported Michael Bloomberg’s controversial change to the term-limits law, allowing him a chance at a third term, because we believe his economic worldview is what the city needs right now as we plunge ahead through a global financial crisis. In addition, his talent at choosing the best and brightest as his top people, such as Police Commissioner Ray Kelly and Schools Chancellor Joel Klein, is what the city needs when each day brings new challenges from unpredictable national and international events.

That said, Mayor Bloomberg’s proposed tax increases on the real estate community—such as a 7 percent property tax raise—would end up being more punitive than restorative, punishing an industry that is already feeling pain from lower rents and increasing office vacancies. In the months ahead, it is essential not to make it more difficult for New York homeowners and landlords—who already pay more than their share—to hang on to their properties. If we squeeze those with a stake in the city too hard, we risk alienating the very people whose faith in New York, backed by their hard-earned dollars, is what sustains us through economic dips and downturns.

New York City property owners are easy targets for a tax increase, since raising property taxes does not require any action by the State Legislature—just approval by the mayor and City Council. And the Council will likely approve such an increase if it means sparing members’ pet projects. But long before we raise property taxes, let’s remember that we need to keep our city competitive with other locations, and that higher property taxes just add to the cost of living and working here. Chipping away at property owners, rather than more prudent pruning, is attacking a vital root in the city’s infrastructure. The Independent Budget Office estimated the city generated $3.3 billion from real estate transfer taxes and mortgage tax revenues in 2007; why punish an industry that’s generating that kind of cash for the city treasury?

Indeed, let’s start with getting rid of waste in government, such as by starting a new pension program for new city workers, one that is more similar to what most American workers have in the private sector. And why not cut back on the excessive use of outside consultants in city agencies?