Thursday, March 19, 2015

ACTING PRESIDENT CROCI:So ordered.

SENATOR DeFRANCISCO: Could you please do the noncontroversial reading of the calendar.

ACTING PRESIDENT CROCI:The Secretary will read.

THE SECRETARY:Calendar Number 86, by Senator Marcellino, Senate Print 458, an act to amend the Vehicle and Traffic Law.

ACTING PRESIDENT CROCI:Read the last section.

THE SECRETARY:Section 4. This act shall take effect on the first of November.

ACTING PRESIDENT CROCI:Call the roll.

(The Secretary called the roll.)

THE SECRETARY:Ayes, 55.

ACTING PRESIDENT CROCI:The bill is passed.

THE SECRETARY:Calendar Number 87, by Senator Ritchie, Senate Print 518, an act to amend the Highway Law.

ACTING PRESIDENT CROCI:Read the last section.

THE SECRETARY:Section 3. This act shall take effect immediately.

ACTING PRESIDENT CROCI:Call the roll.

(The Secretary called the roll.)

THE SECRETARY:Ayes, 56.

ACTING PRESIDENT CROCI:The bill is passed.

THE SECRETARY:Calendar Number 147, by Senator Marcellino, Senate Print 1922, an act to amend the Alcoholic Beverage Control Law.

ACTING PRESIDENT CROCI:Read the last section.

THE SECRETARY:Section 2. This act shall take effect on the 120th day.

ACTING PRESIDENT CROCI:Call the roll.

(The Secretary called the roll.)

THE SECRETARY:Ayes, 56.

ACTING PRESIDENT CROCI:The bill is passed.

THE SECRETARY:Calendar Number 148, by Senator Golden, Senate Print 1996, an act to amend the Public Officers Law.

ACTING PRESIDENT CROCI:Please read the last section.

THE SECRETARY:Section 3. This act shall take effect immediately.

ACTING PRESIDENT CROCI:Call the roll.

(The Secretary called the roll.)

ACTING PRESIDENT CROCI:Senator Krueger.

SENATOR KRUEGER:Thank you. To explain my vote, Mr. President.

We haven't seen one of these residency bills for New York City workers in a while. But for the record, I always vote against them. Because when you do away with the residency laws for New York City workers or any locality's workers, it means that very good-paying jobs are no longer going to people who live in New York City, and they're not spending those good-paying job salaries in the City of New York.

So I actually think there's a strong argument for New York City to have residency laws for its government workers, and I'll be voting no, Mr. President.

Thank you.

ACTING PRESIDENT CROCI:Thank you, Senator Krueger.

Senator Savino.

SENATOR SAVINO:Thank you, Mr. President.

I rise in support of this bill. And I just want to remind people of the reason why we originally had residency laws for New York City employees. It was to keep New York City employees in the City of New York.

However, it did not prevent people who were noncitizens of the City of New York for from applying for the job and getting the job, it just said that if you were offered an opportunity to work for the city you had 90 days to relocate to become a resident of the City of New York. And that worked very well for a very long period of time.

Unfortunately, over the past three decades New York City employees have not had their wages keep pace with the cost of inflation. Many of them have gone many years between contract settlements. And the reality is our municipal workforce finds it as difficult to find affordable housing in the City of New York as everybody else does.

This is an opportunity for them to be able to buy a house while they work for a city that they can no longer afford to live in.

I vote in favor of the bill.

Thank you, Mr. President.

ACTING PRESIDENT CROCI:Senator Golden.

SENATOR GOLDEN:Thank you, Mr. President.

I rise in support of this bill as well. This bill does remove the provision that New York City Department of Sanitation workers must have five years of service before they can reside outside of the New York City area in a neighboring county.

This is the only city agency that is required to wait five years. All of the other city agencies no longer have or do not have a five-year-service requirement before they are able to live in neighboring counties.

Over the years, the cost of living in New York City has increased significantly and it's hard for many of these workers to own their own home and to live in the area. So we provide the sanitation workers with the same ability to live in neighboring counties like we do for all of the other city agencies.

I will vote aye. Thank you.

ACTING PRESIDENT CROCI:Thank you, Senator Golden.

Senator Stavisky.

SENATOR STAVISKY:To explain my vote, Mr. President.

I think this highlights the need for affordable housing in New York City. It's not there.

In my communities that I represent in Queens, affordable housing is one of the major, major issues. And for that reason, I vote aye.

ACTING PRESIDENT CROCI:Senator Hamilton.

SENATOR HAMILTON:Yes. I think it's a great idea to have sanitation workers live outside the City of New York. But what about the minimum-wage workers who are only making $1400 a month? Where do they go?

I believe everybody should have an opportunity to work. Representing the Borough of Brooklyn, many of my residents have a hard time finding a place to live also. We need affordable housing, and we need to keep our jobs in New York City for those people who are struggling to make it.

I believe in the civil service and union workers. I'm a union worker myself. I've been a union worker for all my life, 30 years. And I believe good union jobs are great to have people transition into the middle class.

And I'm going to have to advocate on behalf of New York City residents, especially Brooklyn residents, to keep these jobs in Kings County, the borough that I love.

Thank you.

ACTING PRESIDENT CROCI:Senator Sanders.

SENATOR SANDERS:Greetings.

I think that this does highlight the need for affordable housing in New York City and other places. The argument -- we should not even have this argument if there was affordable housing in New York City and other places.

The solution is not to say, well, just get rid of all requirements of residency, because you're only going to make the problem spread. It will only go to other places. People will run looking for this elusive affordable housing, making the markets every other place go up.

What would be better, if we're going to grapple with this issue, is for this body to seriously say let's move our money where our mouth is, let's put some money into affordable housing -- not simply in New York City, in the state. Let's grapple with this runaway housing market that we find ourselves in, which is hurtful to business communities, hurtful to every community.

But the answer is not to say we give up whatever control, whatever we do have, we surrender it, there's nothing that we can do and therefore get rid of all residency requirements. No. If we say it's affordable housing, let's tackle affordable housing. If we say that we want good jobs -- for the residents to have the first crack at good jobs, let's keep the residency requirement.

Of course I'm voting no.

ACTING PRESIDENT CROCI:Senator Sanders to be recorded in the negative.

Senator DeFrancisco.

SENATOR DeFRANCISCO: Yeah, I'm a little confused.

I don't know what goes on in New York City maybe as much as I should. But if every other individual who's working for the City of New York can move to another location except for the sanitation workers, the lowest-paid of all the city workers -- I don't get it.

It just seems to me they shouldn't be discriminated against because they don't make as much money as the other employees in the City of New York. They should have the same options -- more so, because they're paid less than the other city employees.

So I don't understand the logic, so for that reason I'm going to vote yes.

ACTING PRESIDENT CROCI:Senator DeFrancisco to be recorded in the affirmative.

Announce the result.

THE SECRETARY:In relation to Calendar 148, those recorded in the negative are Senators Comrie, Hamilton, Hoylman, Krueger, Montgomery, Parker, Perkins, Rivera, Sanders and Squadron.

Ayes, 48. Nays, 10.

ACTING PRESIDENT CROCI:The bill is passed.

THE SECRETARY:Calendar Number 168, by Senator Venditto, Senate Print 3824, an act to amend the General Business Law.

ACTING PRESIDENT CROCI:Read the last section.

THE SECRETARY:Section 4. This act shall take effect one year after it shall have become a law.

ACTING PRESIDENT CROCI:Call the roll.

(The Secretary called the roll.)

THE SECRETARY:Ayes, 58.

ACTING PRESIDENT CROCI:The bill is passed.

THE SECRETARY:Calendar Number 185, by Senator Lanza, Senate Print 3709, an act to amend the General Municipal Law.

SENATOR GIANARIS:Lay it aside.

ACTING PRESIDENT CROCI:So ordered. The bill is laid aside.

THE SECRETARY:Calendar Number 192, by Senator Carlucci, Senate Print 1736, an act to amend the Real Property Tax Law.

ACTING PRESIDENT CROCI:Read the last section.

THE SECRETARY:Section 2. This act shall take effect on the 120th day.

ACTING PRESIDENT CROCI:Call the roll.

(The Secretary called the roll.)

ACTING PRESIDENT CROCI:Senator Carlucci.

SENATOR CARLUCCI:Thank you, Mr. President.

This bill -- I want to thank my colleagues for supporting this legislation, which is actually pretty simple. What this legislation does is brings New York State law into the 21st century by simply allowing New Yorkers to do what they do in many cases already.

When you pay your bills, we're paying our mortgage, our car payments, our utility bills, we can do it through direct deposit. But unfortunately in New York State, if you want to pay your property taxes through direct deduction from your bank account, you're not allowed to do that.

By passing this legislation, we're simply allowing municipalities to adopt these policies to allow individual taxpayers, if they'd like, to pay their property taxes through a direct deposit, through their bank account, simply allowing them to set the date and not worry about getting a late payment on their property taxes.

So thank you, Mr. President. I vote aye.

ACTING PRESIDENT CROCI:Senator Carlucci to be recorded in the affirmative.

Announce the result.

THE SECRETARY:Ayes, 59.

ACTING PRESIDENT CROCI:The bill is passed.

Senator DeFrancisco.

SENATOR DeFRANCISCO: Mr. President, could you perform the controversial reading of the calendar.

ACTING PRESIDENT CROCI:The Secretary will ring the bell.

The Secretary will read.

THE SECRETARY:Calendar Number 185, by Senator Lanza, Senate Print 3709, an act to amend the General Municipal Law.

ACTING PRESIDENT CROCI:Senator Krueger.

SENATOR KRUEGER:Through you, Mr. President, if the sponsor would yield to a question.

ACTING PRESIDENT CROCI:Will the sponsor yield?

SENATOR LANZA:Yes, Mr. President.

SENATOR KRUEGER:Thank you.

Do you know what the current increases over the last few years have been in the city's property tax?

SENATOR LANZA:Mr. President, through you, I know that in recent history New York City has increased, has made historic increases to the tax burden that is being paid by property tax owners in New York City, one by -- there was an 18.5 percent increase in property taxes a few years ago when I served in the City Council. Of course I voted against it.

Thereafter, there was a 7 percent increase -- again, one of the largest increases in property taxes in the history of the City of New York. Thankfully, I missed that one, but unfortunately it passed.

One of the things we hear most from our constituents, Mr. President, is the cost of living in New York City has grown too high and we're driving families away at an unprecedented rate.

I just listened to many of my colleagues across the aisle talk about affordable housing. One of the things that makes housing unaffordable to thousands of residents in New York City is the unbridled increases in the property tax rate, especially when you add that together with the New York City income tax and the taxes that are imposed upon just about everything that moves, breathes or exists in the City of New York.

So the people of the City of New York pay among the highest -- have among the highest tax burdens in the country, and we are making living in New York City very unaffordable. And this measure, which would do what we've done in the state, would go in a large way, I believe, to keeping New York City an affordable place to live for families.

SENATOR KRUEGER:Through you, Mr. President, if the sponsor would continue to yield.

ACTING PRESIDENT CROCI:Will the sponsor continue to yield?

SENATOR LANZA:Yes, Mr. President.

SENATOR KRUEGER:So I agree with my colleague that the property tax system in New York City is fundamentally flawed in a variety of ways, and it results in strange increases and decreases depending on what kind of building you live in or where you live.

Does the sponsor recognize that this bill would conceivably do away with the other existing caps that limit tax assessment growth for one-, two-, and three-family homes and small residential buildings that are already under other caps? And does he recognize that he's making an argument for a 2 percent across-the-board cap as a perhaps more citywide equitable system than we current have with caps?

ACTING PRESIDENT CROCI:Senator Lanza.

SENATOR LANZA:Through you, Mr. President. I know my colleague is reading from the memorandum in opposition from the City of New York, which is very interesting. On the first page, the city opposes this measure because it would cost -- and that is their language; of course I don't see it that way -- it would cost the City of New York I think billions of dollars in necessary tax revenue every year.

Of course, the residents of -- if that were even true, the residents of New York City would keep that money, so it would perhaps cost some imaginary bureaucracy, but certainly not the people of New York City.

But the second page then goes on to say that it's not necessary because of all these supposed caps on the property tax that exist in the City of New York. And it says that in fact property taxes don't go up because there are three or four different types of caps that exist there.

Now, I can tell you my residents are unaware of these caps that have kept their property taxes so low. Because if they're caps, they really are nothing more than sieves through which any potential property tax increase that the city would like to impose can happen. So they're really not caps at all.

And so I think that a more effective cap would be to enact this legislation, which would make a real cap at 2 percent every year, which would force the city to live within its means -- force the government, I should say, to live within its means in the same way that the residents of the City of New York would need to live.

SENATOR KRUEGER:Through you, Mr. President, if the sponsor would continue to yield.

SENATOR LANZA:Yes, Mr. President.

ACTING PRESIDENT CROCI:The sponsor yields.

SENATOR KRUEGER:So we may or may not agree about what existing law is. But just for the record, will the sponsor agree with me that he is proposing an across-the-board 2 percent cap to replace the existing system which has a series of different caps based on the class of property, Classes 1, 2, 3 and 4?

So you're proposing an across-the-board 2 percent cap and doing away with the series of other caps; is that correct?

SENATOR LANZA:Mr. President, this legislation would replace the caps that are in existence now in the City of New York, which I can tell you my constituents would tell you have not helped them in the least.

And residents across the city, from Queens to Brooklyn and even in Manhattan and the Bronx, would tell you, if you would ask them whether or not there were caps in place, they would be shocked to find out there were anything called caps, given property tax bills that go up just about every single year.

And so yes, this would be a very simple measure that would simply say that the levy in New York City could not be increased, the property tax levy could not be increased by more than 2 percent per year.

The only reason you would oppose this legislation is if you believe that the city should be able to raise taxes more than 2 percent year in and year out.

And even though there are caps, as my colleague has mentioned -- for instance, one of the back doors to tax increases in New York City is the assessment. For instance, I've received scores of calls from residents across Staten Island this year that, fantastically, their real estate values have gone up by 15 and 20 and 25 percent over last year.

Now, I can tell you, if that were true, there'd be a lot of houses on the market. We received one call from a resident who said "I received my assessment, and if the city says that this is what my house is worth, they can have it, I'll sell it to them. I accept the offer."

Of course, these are just contrived ways that the city increases -- even without increasing the rate, is increasing the property tax. So the caps that are in existence really aren't caps at all. This would effectively keep property tax increases below 2 percent in the City of New York.

And by the way, when we passed the property tax measure in this house which is now the law of the State of New York, many of my colleagues came to me from the city, many Democrats, and said "How can we do this for the rest of New York State and not do this for New York City?"

So I've heard the calls from my colleagues across the aisle who represent areas across the city, and I've said you're right, what's good for the rest of New York State is certainly good for New York City. And so that's what this legislation accomplishes.

SENATOR KRUEGER:Through you, Mr. President, if the sponsor would continue to yield.

ACTING PRESIDENT CROCI:Will the sponsor yield?

SENATOR LANZA:Yes, Mr. President.

ACTING PRESIDENT CROCI:Senator Krueger.

SENATOR KRUEGER:Thank you.

So it's good for the rest of the state. The rest of the state, the individual constituents of towns can override the decision with a 60 percent vote. And yet in your bill you're making it a supermajority two-thirds vote of the City Council. Why isn't your bill consistent with the law we passed for the rest of the state?

SENATOR LANZA:Mr. President, through you. So the rest of the state is what, Senator Krueger?

SENATOR KRUEGER:Sixty percent of the voters.

SENATOR LANZA:Sixty percent. So it's not a simple majority. And in this case this would allow for the City Council -- which, by the way, I think is -- I'm going over my math here -- 9/10ths probably doesn't get you there, maybe 11/12ths, maybe 14/15ths -- 14/15ths is Democrat representation in the City Council. I believe there are three members in the City Council who are of the ilk who voted against the last property tax increase. The rest voted for the property tax increase.

So yes, this would -- it is one of the provisions of the bill I must tell you that concerns me the most, because I wonder if it is really a protection at all. But yes, it would allow the City Council, if they so decided that it was so necessary to raise taxes more than 2 percent, it allows that pressure release valve, if you will, to enact a property tax increase that exceeds the 2 percent.

SENATOR KRUEGER:Through you, Mr. President, if the sponsor will continue to yield.

ACTING PRESIDENT CROCI:Will the sponsor yield?

SENATOR LANZA:Yes, Mr. President.

ACTING PRESIDENT CROCI:Senator Krueger.

SENATOR KRUEGER:I'm not sure the partisan makeup of the City Council is relevant, because I think by and large every elected official doesn't wish to have higher taxes than their locality needs to function.

So something else that's different, while we passed a tax cap for other than New York City, we also provide AIM, local revenue-sharing, to everyone but New York City. Why doesn't your bill include AIM? Since you're limiting the city's ability to tax itself, why don't you have an AIM requirement for New York City?

I think New York City has already lost, over the last five years, well over a billion dollars in revenue-sharing in the state budget.

SENATOR LANZA:Through you, Mr. President. Really the intention of the legislation was to in fact impose a 2 percent limit, a 2 percent property tax cap. And really, we weren't searching, I must confess to you, searching for ways to water that down to allow the city to have various ways to get beyond that 2 percent. We tried to limit it to things that made sense.

There are certain exclusions. But really, we wanted this to be 2 percent, not 3 percent or 5 percent or 10 percent, which we know, year in and year out, the city is looking to do.

SENATOR KRUEGER:Through you, Mr. President, is the sponsor aware of statewide research showing that --

ACTING PRESIDENT CROCI:Senator Krueger -- will the sponsor continue to yield?

SENATOR LANZA:Yes. Yes.

ACTING PRESIDENT CROCI:Senator Krueger.

SENATOR KRUEGER:Oh, excuse me, Mr. President. Thank you.

-- statewide research out of Cornell University showing that the effect of the tax caps outside of New York City has been across-the-board cuts in public safety expenditures in cities, counties, towns, villages?

A 4.2 percent cut to public safety expenditures in cities, 6 percent cut in public safety expenditures to counties. Now, the City of New York is technically five counties. So I'm going to say the impact would be, based on the research for the rest of the state, between a 4 and 6 percent cut in public safety expenditures.

Does the sponsor think that is justifiable? Particularly since he just explained to me his goal was to cap property taxes, not ensure that the City of New York had adequate funds to provide public services.

SENATOR LANZA:Through you, Mr. President, two points in response to that statement.

First, with respect to public safety. So in the City of New York's memo of opposition, they tout the fact that they have -- and I think this goes to your first question, which was was I aware of what the property taxes have been over the last several years. Presumably your point was that they were less than 2 percent, which I would argue with by virtue of the fact that taxes have increased through assessment increases.

But nevertheless, the city touts that property taxes have been kept lower over the last several years. And by the way, at the same time I know you have touted and the city has touted that crime is also at an all-time low. So that would seem to belie the point that you just made with that survey.

But the second point in respect to that survey, I don't know who those folks are, I don't know what their agenda is, I don't know what their leanings are, I don't know what their expertise is.

But I can tell you the only study I need is the real-world experience of living in the City of New York. And I can tell you one of the statistics that I would cite are the numbers of "for sale" signs, which is, I think, a more powerful statistic, more powerful evidence. And unbiased, coming from an unbiased source, not some think tank group that may or may not have a political agenda -- but from real people who actually need to live here in the City of New York.

And by and large, and more often than not, people are making the decision to leave the City of New York. And when you ask them -- these are folks that I've grown up with, friends of mine -- when you ask them why they're leaving, they're saying that you just don't get value these days in New York City. We pay and we pay and we pay. Property taxes go up, the water bill goes up, taxes on our phones, on our electricity, on our gasoline, they keep going up. Every place you turn, there's a new tax and a new fee. And folks feel like they're just not getting value in return.

It's one thing to pay for a Rolls Royce and get it, but it's another thing to pay the price of a Rolls Royce and leave with a Schwinn bicycle. And that's how people are feeling. And so people are choosing to move with their feet.

And that's the statistic, that's the best study for me to know that we've got to make housing more affordable. And one of the culprits that has made that not the case in the City of New York is the City of New York.

SENATOR KRUEGER:Through you, Mr. President, on the bill.

ACTING PRESIDENT CROCI:Very good. Senator Krueger.

SENATOR KRUEGER:Thank you.

You know, I don't think the sponsor or I actually disagree on a desire to have reasonable property taxes, to have an expectation of what they will be next year and the year after that. I think we disagree on the solution to get there.

For at least 20 years, this Legislature has been asking the City of New York formally, through every time we re-up the existing property tax system in the City of New York, to in fact give us a more rational property tax system. So when my colleague is frustrated with the stories he hears from his neighbors, trust me, I hear from my neighbors that our property taxes are too high also.

And when you look into the questions, assessments, how they're done, valuations, what the tax rate is, you learn under the City of New York's property tax system there's incredible inequity, with some people paying ridiculously more amounts in property tax than others, even though it appears they live in approximately the same kind of home, whether it's a single-family house or an apartment.

So I agree there's something very wrong with New York City's property tax system. But I don't think a 2 percent across-the-board maximum increase per year will get us a solution. In fact, it will continue the exact same problems, with a 2 percent cap creating additional new problems on top of it. Because we won't have done anything about a fair valuation of how we determine property taxes, a fair valuation of whether some are paying too much and some are actually paying too little.

It will just lower revenue for the City of New York so that there will be a reduction somewhere else in the city budget. When you take away revenue and you mandate a tax takeaway of revenue through a state cap but you don't do anything about unfunded mandates, you don't do anything about having a fair AIM system that provides New York City revenue-sharing like we do the rest of the state, it doesn't do anything in our budget to actually make good on our obligations under the Campaign for Fiscal Equity lawsuit that still underfunds, disproportionately, schools in high-needs poor communities, which is actually New York City among other areas of the state -- all you're going to see is a reduction in money available for education and public safety.

The research does confirm it from a number of states around the country but also right here in New York State. The research I was citing was from Cornell University, Department of City and Regional Planning, Dr. Mildred Warner, "New York Property Tax Cap Implications for Local Fiscal Health." I'd be happy to get anyone a copy of the report.

But Dr. Warner actually has a fairly amazing website up there at Cornell University with all kinds of reports on the economics to localities and what our policies here are doing to our local governments. I have reports showing the impacts in California and Massachusetts by moving down the road of creating tax caps.

It's a solution, it's not the right solution. I would even argue that the press conference I was involved with yesterday calling for circuit breaker property tax issues was a much more effective way to deal with impacts of disproportionately high taxes for people who literally can't afford to stay in their homes if they don't get some property tax relief.

That is also not an across-the-board model, but rather a model that recognizes there are people who literally are being taxed out of their homes throughout the State of New York. And research shows that circuit breaker models are a far more effective model than across-the-board caps for dealing with the problem for those most in need.

So I wish there was another bill before me today, because I think there are lots of ways we could address this correctly. I urge the City of New York to meet its obligation to come up with a new model, a fair and equitable model for property taxation in the City of New York. They are way behind the scheduled obligation to do so. It would mean there were some winners and some losers, but it could be designed in a way that I think both the sponsor and myself could say that's a fairer, more equitable way to determine property taxes in the City of New York.

We have a new opportunity to save the City of New York another 1 billion to 1.2 billion in lost property taxes. Before the end of June, we can choose not to extend or renew the 421a tax abatement system, which is now losing the City of New York $1 billion to $1.2 billion a year with almost no affordable housing in exchange. If they had that revenue in their property tax portfolio, maybe I could even agree that a tax cap is something I could imagine doing.

So perhaps the sponsor will join me in agreeing that we shouldn't do the 421a tax expenditure program this year.

So I'll be voting no, Mr. President. Thank you very much.

ACTING PRESIDENT CROCI:Senator Krueger will be recorded in the negative.

Senator Hamilton.

SENATOR HAMILTON:Thank you, Mr. President.

Mr. Lanza, would you yield to my question, please?

ACTING PRESIDENT CROCI:Will the sponsor yield for a question?

SENATOR LANZA:Yes, Mr. President.

SENATOR HAMILTON:I do agree with what you're saying that we do need a tax cap on real estate property taxation throughout the Borough of Brooklyn and throughout New York City.

But what is the current cap rate right now on one-, two-, and three-family homes?

SENATOR LANZA:Through you, Mr. President, there really is not a cap. There are slow-down provisions in the present structure that say, well, if your taxes on paper have increased through assessments, let's say at -- we say that by 20 percent, that the increase that hit your bill is limited to no more than 5 percent a year. But that really isn't a cap, because in effect what the city is saying is your taxes have gone up, we're just going to give you a little time to pay them.

SENATOR HAMILTON:Will the sponsor yield to a question?

ACTING PRESIDENT CROCI:Will the sponsor continue to yield?

SENATOR LANZA:Yes.

ACTING PRESIDENT CROCI:Through the chair, Senator Hamilton, please.

SENATOR HAMILTON:Mr. Chair, yes. Thank you.

Can you explain to me the residential assessment ratio and how property taxes created a levy on one-, two-, and three-family homes? What is the current residential ratio assessment percentage right now?

SENATOR LANZA:Through you, Mr. President, that changes each year. That occurs by vote of the New York City Council. It really is an archaic system that I can assure you no one really in the City of New York who pays property taxes can even understand. I think there have been recent stories in a number of journals that have said that New York City's tax structure is just archaic, it's not understandable, it's cumbersome, and it doesn't make any sense whatsoever.

SENATOR HAMILTON:Mr. President, will the sponsor yield to a question?

ACTING PRESIDENT CROCI:Will the sponsor continue to yield?

SENATOR LANZA:Yes, Mr. President.

SENATOR HAMILTON:For clarification, the tax rate and the residential assessment ratio are two different numbers. The tax rate is created by the City Council, and the residential assessment ratio is created by New York State.

So -- and also, in answer to your question, the current cap is 6 percent a year and no more than 20 percent over a five-year period.

And, Mr. President, will the sponsor yield to a question?

ACTING PRESIDENT CROCI:Will the sponsor continue to yield?

SENATOR LANZA:Was that a question, Mr. President?

SENATOR HAMILTON:No, it was a statement, I'm sorry. And so the question is -- I'm sorry, the question is when was this --

ACTING PRESIDENT CROCI:Senator Hamilton, if you'd please direct the questions Through the chair.

SENATOR HAMILTON:Mr. President, can I --

ACTING PRESIDENT CROCI:Thank you.

SENATOR HAMILTON:Will the sponsor yield to a question?

So the question is, when was this cap created? What was the base year for the cap?

SENATOR LANZA:Mr. President, through you. I'm sorry, Senator Hamilton, I'm not understanding the question. Which cap?

SENATOR HAMILTON:There's a current cap on one-, two-, and three-family homes. It's 6 percent a year, no more than 20 percent over a five-year period of time. I'm just trying to find out, do you know when that cap was created, when it was originally introduced?

SENATOR LANZA:Mr. President, through you. Yes, it really is not a cap. If you understand how property taxes are collected in the City of New York, you'll understand that it's not a cap. What it says is when the city has assessed you in such a way that they've determined that your property taxes need to increase by more than 6 percent -- let's say 20 percent, which is what's happening across New York City right now -- that you don't need to pay that all at once, they will slow down the period of time in which you pay it. So it really isn't a cap. It is just a provision that gives you time to pay that. In essence, your taxes have been increased. You're just not going to have to pay them all in the first year.

SENATOR HAMILTON:I think you're mis -- you're un --

ACTING PRESIDENT CROCI:Senator Hamilton.

SENATOR HAMILTON:Yes, Mr. President, may --

ACTING PRESIDENT CROCI:Would you like the sponsor to continue to yield?

SENATOR HAMILTON:-- the sponsor yield to a question. Yes.

ACTING PRESIDENT CROCI:Will the sponsor continue to yield?

SENATOR LANZA:Yes, Mr. President.

ACTING PRESIDENT CROCI:Senator Hamilton.

SENATOR HAMILTON:I think you're getting confused with the residential tax cap and also with the transitional cap that's done for Tax Class 2 and Tax Class 4 properties. I know this because I was a tax assessor for over two decades for the City of New York, and I defended property taxes for the City of New York.

And the base year for the cap at 6 percent for residential property started in 1980-1981. So therefore, what people are being taxed at is half of the market value.

So I do understand there's an issue in Staten Island, but New York City has one of the lowest tax rates for property in the surrounding areas. Nassau County, Suffolk County, New Jersey, Connecticut all pay higher taxes for their homes. Park Slope, for instance, a home costs 2.5 --

ACTING PRESIDENT CROCI:Senator Hamilton, are you asking a question or are you speaking on the bill?

SENATOR HAMILTON:The question is -- yes, the question is how much money -- what percentage of New York City's budget comes from property taxes?

SENATOR LANZA:Mr. President, I really wish Senator Hamilton had not told me that he was a tax assessor, because I really liked him.

SENATOR HAMILTON:I'm sorry --

(Laughter.)

SENATOR LANZA:Now I've got to process that new information.

So let me cut through this. I'm not confused at all. The only people who are confused are people who would want to stand and tell you that property taxes have not gone up in the City of New York virtually every single year.

So if you look at the bills that people pay in my district, for instance, they've gone up every single year whether or not there was an increase in the tax rate or not. And the way that happens is that when the city does not have the political support to raise the rate, they have folks who go out throughout the city, tax assessors, who then look at your house and really, if you ask my constituents, blind to the realities of the marketplace, will tell you that your house has just gone up in value by 20 percent.

That is what is happening in Queens and Brooklyn and Staten Island this year. This year the tax bills have come up. And the assessments say that values have gone up by 20 percent. That's a lie. That hasn't happened in reality. It's only happened by virtue of statements being made by tax assessors on behalf of the City of New York whose only goal is to raise property taxes without raising the property tax rate.

So I can only report to you, Mr. President, what I hear from my constituents and what I see on my property tax bill, which is that property taxes go up in the City of New York.

This is a very simple measure. I think this discussion and this debate points out the complexity and the ridiculous nature of the process that we have in the New York City property tax structure.

The solution -- and there may be more than one solution, as Senator Krueger has pointed out, that we could possibly agree on. But I think the simplest is this measure, which simply says we're going to get rid of all that crazy system that's out there that is very difficult, as you've just said, Senator Hamilton, to understand and to describe and for people to understand why it is that their taxes are going up.

We should replace it with a system that simply says you cannot raise our property taxes by more than 2 percent in any given year.

SENATOR HAMILTON:Mr. Speaker, I'd like to ask a question on the bill.

ACTING PRESIDENT CROCI:Will the sponsor continue to yield for a question?

SENATOR LANZA:Yes, Mr. President.

ACTING PRESIDENT CROCI:Senator Hamilton.

SENATOR HAMILTON:This is my last question.

What is the amount of money that New York City derives from property taxes right now in New York City?

SENATOR LANZA:Through you, Mr. President, without being flippant, really, too much. If you ask the people I represent.

(Laughter.)

SENATOR LANZA:And that is the nature of this legislation. So, you know, it's very simple. If you think the city ought to raise taxes by more than 2 percent, then you vote no on this legislation. If you think the city should not raise taxes by more than 2 percent, then you vote yes on this legislation.

(Scattered applause.)

SENATOR HAMILTON:Thank you. Thank you, Senator Lanza.

ACTING PRESIDENT CROCI:Order in the house.

Senator Hamilton will be recorded in the negative?

SENATOR HAMILTON:Mr. President, I'd like to speak on the bill.

ACTING PRESIDENT CROCI:Senator Hamilton on the bill.

SENATOR HAMILTON:Yes. I have done property taxes for over two decades, and New York City has one of the best property tax levies in the tri-state area. We pay less taxes than anybody else.

Forty percent of the budget for New York City comes from property taxes. It's $18.7 billion. And to put that tax revenue in jeopardy, I would have to vote against that.

Right now the cap rate is 6 percent a year, no more than 20 percent over a five-year period, which started in 1980-1981. The appreciation of properties has outpaced the 20 percent over a five-year period. Just in my neighborhood alone, houses that we bought 15 years ago for under $300,000 are now selling for $1.5 million. The tax rates cannot keep pace with the appreciation of property in New York City right now.

So right now our tax base is great. Your market value compared to what you're paying in taxes, this has to be at least a 50 percent difference. So even though your market value may be million dollars, you're only paying taxes on a half a million dollars.

So to deny New York City the revenue that we need for our schools -- we're only graduating kids -- only 60 percent of New York City kids are graduating high school. Only 15 percent are able to go to college. And by reducing the property taxes, we're hurting our educational system.

So I have to vote no on this bill due to the fact that I don't think the people who have put this bill forward have thoroughly thought it out. They don't understand the difference between the tax rate and the rational assessment ratio, they're just two different things. And transitional values is for Tax Class 4 properties, not understanding that also.

So I think we need to have a full understanding of property taxes and how they affect residents in New York City before we introduce bills.

Thank you.

ACTING PRESIDENT CROCI:Senator Hamilton to be recorded in the negative.

Senator Stavisky.

SENATOR STAVISKY:Yes, I think this Legislature is very fortunate to have somebody who is an expert in this particular area.

I know words like "assessor" bring out all kinds of feelings. At the same time, there's a professionalism which Senator Hamilton brings to this chamber, and I for one appreciate his insights because he has spent so many years studying this issue.

I have a couple of -- I'm not going to ask any questions, but I have a number of concerns.

Yes, this is a simple answer, but the situation is far more complex. I believe that the real way to resolve some of these property tax issues in New York State is for the city administration to take another look at how they classify property. That to me is a very basic situation.

For example, co-operatives are not assessed and not taxed fairly. And I don't know how this bill would affect co-ops; presumably, the way it would affect the rental market. And we have asked this of this previous administration on many occasions, to take another look at how property is classified.

Secondly, the reason the City Council is involved in these issues is very simple. That's the only tax they can do without the State Legislature. So they increase property taxes. And I'm willing to bet that most Councilmembers do not want to vote to increase taxes, they would rather have the right under home rule to tax a more fair tax.

The other point I want to make is that I wish this legislation had some concept of a circuit breaker, which I think makes it even more equitable to property owners in New York State, not just New York City.

And for this reason, Mr. President, I vote no.

ACTING PRESIDENT CROCI:Senator Stavisky to be recorded in the negative.

Senator Golden.

SENATOR GOLDEN:Thank you, Mr. Chairman. On the bill.

In 2003 we raised the property taxes in the City of New York to 17 percent, and we did that because of 9/11. And we brought our city back towards magnificence, and we're still working to give more opportunity to that great city.

But the City of New York should have been trying take the property tax down since 2003 as we recouped from 9/11, and we haven't done that. We've had conversations here where Senator Lanza was talking about levy and Senator Hamilton was talking about assessments. Two different conversations going on.

Senator Lanza's bill is a good bill and it's a positive bill for the taxpayers in the City of New York. And what others leave out in this room is the city tax that we pay. We have to be able to include that city tax that nobody else pays into our real estate tax, and then it's not as equitable as people would say or believe.

So I believe we should work with 421a and create more affordable housing. I believe we have to do more J51s so we can maintain the stock that we have.

And I look forward to sitting with Senator Krueger and others on the Democratic side, as well as Senator Lanza, Senator Simcha Felder, and the chair of Finance here, Senator John DeFrancisco, in trying to not only move in a direction in getting this 2 percent cap done, but try to help to bring down taxes across the board in the City of New York so that we have more opportunity and we create the housing that's necessary for those that need to require to be able to live, grow, raise their families and work in the great City of New York.

So I vote aye, and I congratulate Senator Lanza on a great piece of legislation that will do great things for the people of the City of New York in bringing down the tax base. That's what we should be doing.

Thank you, Senator Lanza. I vote aye.

ACTING PRESIDENT CROCI:Senator Golden will be recorded in the affirmative.

Senator Savino.

SENATOR SAVINO:Thank you, Mr. President.

I also am rising to vote in favor of this bill. And it's been suggested that it's a simple solution to a complicated problem. And there is no doubt that the New York City property tax system is not just complicated, it's almost byzantine.

And I'm happy to find out that Senator Hamilton is a property tax expert, because I would invite you to come to Staten Island and explain not just to myself but to my constituents why they think they're getting a good deal on property taxes. That would be right after you've paid $16 to cross the Verrazano Bridge, Senator Hamilton.

The facts are our property tax system is a mess, there is no doubt about it. But I would love someone to explain to me -- just me, I always view myself, I'm my own constituent -- why I own a house that is valued at $325,000 on a good day and I pay higher property taxes than a neighbor of mine whose house is valued at $500,000. Maybe you can help me understand that.

But until we get a handle on this complicated problem, maybe we need simple solutions to complex problems. This might be a simple solution, but it will matter to a whole lot of people.

And finally, while we try and say all the time that New York City property taxes are not that high -- in comparison to the suburbs, they're not -- we have a little other burden that we carry every day. It's called income tax.

So you have to combine the two issues together to get a real view of the burden, the property tax burden, the tax burden that the residents of New York City pay. Property taxes is a small piece of it. Income tax, property tax, high tolls, you name it, they're piled on us. And this may be a simple solution, but we have some very complicated problems.

I vote in favor.

Thank you, Mr. President.

ACTING PRESIDENT CROCI:Senator Savino will be recorded in the affirmative.

Senator Hoylman.

SENATOR HOYLMAN:Thank you, Mr. President. I rise to speak on the bill.

I wanted to thank my colleagues for the interesting debate, because I think it's been pointed out that New York's tax structure is topsy-turvy, to say the least. And there are serious issues with the way New York City currently assesses property taxes.

One glaring example, Mr. President, is that the owner of a $100 million penthouse overlooking Central Park -- and it's hard to believe a place like that exists, but it does -- a $100 million penthouse has the same property tax as an apartment which is 94 percent that value.

And the property tax for that $100 million independent house is just $17,268. Which sounds like a lot to us, but to the global super-rich who are purchasing literally blocks of apartment buildings in Manhattan, that's a pittance.

And that amount for that $100 million condo represents only .0017 percent, less than 200ths of a percent of the property's sale price. Something is clearly out of whack.

So I thank Senator Lanza for raising the issue of property tax caps, but I think we need to take a step back, Mr. President. I think this body should take the lead in reassessing how we value apartments and properties in New York City.

Now, the disparity is partially the result of that 421a property tax abatement, which I'm sure we're going to be debating later in the session. But it's also, as I mentioned, a problem of the assessment formula that determines the fair market value of condos.

And you have to put "fair market value" in quotes, because that's not based on the actual sale price, it's based on the income per square foot that is generated by nearby apartments. And that can be a $100 million apartment, but it also can be the rent-stabilized rental apartment. And that's wrong. And I think it results in a lot of wealthy people not paying their fair share in our state.

And, Mr. President, the other point I'd like to make is that, you know, here we are 150 miles away from New York City and what we have from the City of New York is this one-page memo of opposition. But behind this memo of opposition stand millions of New Yorkers who are vulnerable, who need services, who can't make it on their own.

And for us to sit here without the advice and consent of the City Council and suggest that we should cut their services I think is unconscionable.

So I'll be voting no, Mr. President.

ACTING PRESIDENT CROCI:Senator Hoylman will be recorded in the negative.

Seeing no other members wishing to speak, debate is now closed and I'll call on the Secretary to ring the bell.

The Secretary will read the last section.

THE SECRETARY:Section 3. This act shall take effect immediately.

ACTING PRESIDENT CROCI:Call the roll.

(The Secretary called the roll.)

ACTING PRESIDENT CROCI:Senator Martins to explain his vote.

SENATOR MARTINS:Thank you, Mr. President.

I rise and I want to thank Senator Lanza for sponsoring this piece of legislation. And I will be voting in the affirmative.

You know, taxes, whether it's New York City or whether it's in other parts of the state, they're handled the same way. Just because we live in a village on Long Island or whether they live in New York City, the only difference is we don't have an income tax component to it. But we also have to deal with the ORPS and assessment and we also have to deal with rates --

ACTING PRESIDENT CROCI:May we have order in the house, please.

Senator Martins.

SENATOR MARTINS:So the idea that a city that had a $3 billion surplus somehow can't have the same fiscal discipline that we have asked from every other village, town and county throughout the state I believe is absurd.

The idea that we're going to require a different standard in New York City than we require from any other part of this state -- and yes, every other part of this state, if they want to overcome the cap, has to have a 60 percent vote of their legislative body. Whether it's a town council, whether it's a village board, whether it's a county legislature, they have to have a supermajority in order to overcome the cap.

All we're doing is putting that same fiscal discipline and requiring that same fiscal discipline for the benefit of residents and taxpayers of New York City. And I'm amazed that there are residents and representatives here from New York City that would vote no.

Mr. President, I vote aye, and I want to thank Senator Lanza for bringing this to the floor.

ACTING PRESIDENT CROCI:Senator Martins will be recorded in the affirmative.

Announce the result.

THE SECRETARY:In relation to Calendar 185, those recorded in the negative are Senators Breslin, Comrie, Espaillat, Gianaris, Hamilton, Hoylman, Krueger, Montgomery, Parker, Peralta, Perkins, Rivera, Sanders, Serrano and Squadron.

Absent from voting: Senators Addabbo, Bonacic, Díaz, Griffo and Sampson.

Ayes, 42. Nays, 15.

ACTING PRESIDENT CROCI:The bill is passed.

Senator Ritchie, that competes the controversial reading of the calendar.

SENATOR RITCHIE:Is there any other business at the desk?

ACTING PRESIDENT CROCI:No further business at the desk.

SENATOR RITCHIE:There being no further business, I move we adjourn until Monday, March 23rd, at 3:00 p.m., intervening days being legislative days.

ACTING PRESIDENT CROCI:On motion, the Senate stands adjourned until Monday, March 23rd, at 3:00 p.m., intervening days being legislative days.

Senate is adjourned.

(Whereupon, at 12:24 p.m., the Senate adjourned.)