Relates to the determination of adjusted base proportions in special assessing units which are cities for the fiscal year 2010

Title of bill

An act to amend the real property tax law, in relation to the determination of adjusted base proportions in special assessing units which are cities for the fiscal year 2010

Summary of provisions

This bill would amend section 1803-a of the Real Property Tax Law to cap the maximum class growth rate at zero percent for fiscal year 2010.

Justification

State law requires New York City to adopt class shares based on rates calculated by the State Board of Real Property Services (SBRPS) in order to distribute the tax levy among the four classes of real property. This year the State Board's class equalization rates would cause the tax burden on property tax class one, comprised one-, two-, and three-family homes; and property tax class two, comprised of multi-family co-operative, condominium and rental apartments, to increase dramatically.

This bill is designed to provide relief for the residential property tax classes one and two. The "uncapped" current base proportions of class one and class two would grow by nearly 30 percent and 4 percent, respectively, from fiscal year 200B, under the State Board's calculations. Currently, State law provides that the current base proportion of any one class may not exceed the adjusted base proportion for that class from the prior year by more than five percent. This legislation would adjust that rule, for one year only, to cap the maximum class growth at 0.0 percent for New York City. The effect of this change would be to reduce the amount by which the current base proportions for classes one and two are allowed to grow, resulting in an estimated tax increase of 1.2 percent for class one and 1.8 percent for class two. This would result in citywide savings of about $157 for a typical owner of a class one single family home, and $170 for a typical owner of a co-operative apartment. Owners of rental buildings will also see savings of $95 on average.

Failure to enact this legislation would leave the City Council no option but to adopt the SBRPS formula for establishing class shares. In that case, the estimated tax rate increase for both class one and class two would be about six percent and would cause significant increases in the tax bills for residential homeowners and renters. The tax rate increases for classes one and two, resulting from SBRPS procedures, is avoidable only through passage of this legislation.

Fiscal implications

To be determined.

Effective date

Immediately.