New York City

In Albany, de Blasio pressed over property tax cap

January 27, 2016 By David Klepper Associated Press
New York City Mayor Bill de Blasio, right, talks with Sen. Adriano Espaillat (D-New York) before testifying during a joint legislative budget hearing on local government on Tuesday in Albany. AP Photo/Mike Groll
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New York City Mayor Bill de Blasio got the full Albany treatment Tuesday as state lawmakers grilled him for five hours over his city’s finances and its status as the only local government in the state not subject to a cap on property taxes.

The Democratic mayor argued against the tax cap, saying his administration has found billions of dollars in savings and is committed to strengthening the city’s financial position. He also urged lawmakers to oppose a proposal by Gov. Andrew Cuomo to shift some Medicaid and higher education costs from the state to the city.

The tough questions reflected the belief of many Upstate and Republican lawmakers that New York City gets special treatment from Albany and a pass when it comes to the fiscal restrictions put on other communities, allowing it to build up billions in budget reserves while other communities cut back on services.

“The bottom line is that the city is awash in money right now,” said Sen. Catharine Young (R-Olean), the chair of the Senate Finance Committee. “And localities across the state … would only dream of having surpluses.”

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De Blasio noted that his city includes 43 percent of the state population but generates 57 percent of state revenue. He said his administration has no plan to raise taxes and noted that the city’s current tax rate is lower than its surrounding counties. Still, he said, he objects to efforts to “tie our hands.”

“That would be a very dangerous path for New York City,” he said, adding that his own budget proposal recommends a city spending increase of less than 1 percent.

In a not-so-subtle message to de Blasio, the state’s GOP-led Senate chose the day of de Blasio’s visit to vote to impose the tax cap on the city. The measure likely couldn’t pass the Assembly, dominated by Democrats from New York City, but it will give the Senate Republicans leverage as they negotiate the state budget.

Supporters of extending the cap note that even without increases to tax rates, higher real estate assessments translate into higher tax bills for families struggling to keep up.

“This legislation will put an end to out-of-control tax increases that are being forced upon us,” said Sen. Adam Lanza (R-Staten Island). “New York City government needs to live within its means in the same way families are forced to do.”

The tax cap limits increases in the property tax levied by local governments to 2 percent or the rate of inflation, whichever is lower. The cap can be exceeded by a 60 percent supermajority vote of the local governing body.

De Blasio was also questioned over his opposition to Cuomo’s proposal to shift some higher education and Medicaid costs to the city. In his state budget proposal, the Democratic governor recommended making the city responsible for paying hundreds of millions of dollars for Medicaid and the City University of New York system, costs that are now covered by the state.

Following de Blasio’s objections, Cuomo said his administration would work with the city to find savings to prevent new costs. That process is expected to play out as Cuomo and lawmakers negotiate the state budget over the next two months.

“The governor put forward the proposal and then the governor clarified the proposal,” de Blasio said. “We take the governor at his word.”


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