BILL NUMBER: S411
SPONSOR: GOUNARDES
 
TITLE OF BILL:
An act relating to enacting the New York City truth in budgeting act
 
PURPOSE OR GENERAL IDEA OF BILL:
To provide transparency when the City of New York increases property
taxes by keeping tax rates flat while property values rise
 
SUMMARY OF PROVISIONS:
Section one provides that this act shall be known as the "New York City
truth in budgeting act."
Section two of the bill sets definitions.
Section three of the bill outlines a process by which the City of New
York shall create a public notice and a series of public hearings on all
property tax increases which exceed two percent.
Section four sets the effective date.
 
JUSTIFICATION:
Property taxes form the fiscal backbone of local government in New York.
Less cyclical than sales or income taxes, property taxes allow municipal
governments to provide critical services such as homelessness
prevention, firefighting, and public education over both the short and
long term. Yet the property tax levy in New York City, which more than
tripled from $8.4 billion in 2000 to $29.6 billion in 2019, has become
less a stable source of income and more a windfall profitmaker. This has
in turn led to such enormous growth of the New York City budget ($20
billion in six years) that it is difficult to know where to make cuts as
we navigate potential recessions.
The property tax levy has ballooned thanks to New York City's booming
housing market and the corresponding appreciation of real estate values.
This fortuitous growth has allowed officials to only slightly increase
or keep flat the tax rates for each property tax class and claim that
they have not increased property taxes - yet if that were trueäthe levy
would not have tripled in the past six years. In practice, the NYC
Department of Finance both assesses the market value of all properties
in the city and recommends tax rates for each type of property to the
City Council. The Council then approves these rates as part of the annu-
al budget process each June. For the average taxpayer, there is no tran-
sparency about the way their property taxes continue to be raised year
after year. Nor do the residents of New York City benefit from the same
2% property tax cap found in the rest of the state that helps clamp down
growth in the levy.
This bill will mandate that, for any increase in the property tax levy
above 2%, the city must provide full disclosure on the difference
between the proposed budget and one that achieves zero growth of the
levy by offsetting rising property values with a reduction in the tax
rate. hearings throughout the city before the City Council adopts the
final budget. Such "truth in budgeting" laws are already in place in
several other states such as Maryland, Tennessee, Texas, Utah, and
Virginia, and have been recommended in the past by the Tax Equity Now
coalition which sued the city and state in 2017 for a property tax
system it called racially discriminatory. New York City's homeowners,
landlords, and small businesses are already struggling to make ends
meet. They deserve real and immediate relief for a property tax burden
that has become too heavy to bear. Absent that, the very least we can
provide them is the same transparency and opportunity to weigh in on tax
increases that their upstate counterparts enjoy.
 
PRIOR LEGISLATIVE HISTORY:
2024: S21 - Referred to Cities 1
2023: S21 - Referred to Cities 1
2022: S513 - Referred to Cities 1
2021: S513 - Referred to Cities 1
2020: S8644 - Referred to Rules
 
FISCAL IMPLICATIONS:
To be determined
 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to the fiscal
year next succeeding the date on which it shall have become a law.