When Mayor de Blasio arrived in Albany on Tuesday, he had a lot to talk about: aid to CUNY, cost-sharing for Medicaid, mayoral control of the schools and more. Instead, upstate lawmakers wanted to talk about a property tax cap. New York City is the only place in the state that doesn’t have one, and apparently that irks Republicans.
The property tax is one of the few revenue lines that the city controls on its own. If it wants to raise other taxes, like the income tax, it has to go to Albany for approval. That fact is probably not unrelated to the push to get the mayor to surrender his authority to raise the property levy.
The property tax accounts for about 40 percent of the city’s revenue each year, twice as much as the personal income tax (about 20 percent) or sales tax (roughly 14 percent). Mayor Bloomberg oversaw a significant increase to close the post September 11 budget gap, a move that hurt his first-term popularity a lot. As the chart above indicates, growth in the tax rate has been modest; it actually dropped last year on “class 1” properties. Since property tax revenue grows with property values, those numbers (in the chart below) rise a little more, especially for some classes of properties.
There are certainly elements of the property tax that might be improved. Hoping to spur low-income housing production, some have called for changes to how vacant or unused property is taxed. Others have highlighted disparities in how different properties are taxed. And, of course, there’s the ongoing debate about the value and fairness of 421-a, a property-tax break.
But the numbers above and below don’t seem to scream out for a property-tax cap—however useful the topic might be for people who’d rather not talk about the city’s actual needs.
(Class One is primarily one-, two-, and three-family homes; Class Two is all other residential property; Class Three is owned by utility companies and Class Four is all other commercial property.)