As the City’s Finance Commissioner during the Bloomberg Administration, Martha Stark helped bring a new level of transparency to the property tax system. For the first time, owners were notified of the process and information that was used to assess their property taxes.
Now, as the co-founder of Tax Equity Now New York (TENNY), she’s leading the charge to change the system itself. A coalition of renters, owners, public policy and social justice organizations, TENNY is seeking a court order to declare the current system unconstitutional.
“The transparency that we engaged in during the Bloomberg Administration started to highlight to building owners the components of the system,” she said. “They learned how the department valued property, and how the structure of the property tax made it more complicated — and made it unfair to many owners.”
For example, why does a home in Park Slope pay less taxes, factored as a percentage value of the home, than one in The Bronx?
“It’s because their assessments aren’t equal,” she said.
Here’s why: When a 1981 law changed the property tax structure, it capped increases in property assessments at 6% a year. As part of the re-set, all homes in the City should have been reassessed to create a clean slate.
But the reassessment didn’t happen. The State legislature didn’t demand it, and as a result, homes throughout the boroughs began this new program with pre-existing inequities.
The assessment caps exacerbated the inequities. “If you’re in a neighborhood where property values are growing faster than the 6% assessment cap, like Park Slope, then the law benefits you,” said Stark.
Indeed, if the City is only able to capture a 6% assessment increase every year, and the value of a Park Slope home increases 10% in a year, the City will only capture 6% of that. “While in The Bronx, if the property value increases 5% in a year, the City can capture all of that increase,” said Stark. “Homeowners in the City’s neighborhoods with lower values wind up paying a higher share of their value in taxes.”
There are other factors in the lawsuit — one of them being inequity in assessment between rental buildings and co-ops and condos. Stark pointed to a recent purchase of a condo for $200+ million, while the City’s value for that condo — and the basis for its tax bill — is about $12 million.
“We felt that the State courts needed to be involved and to declare the property tax system unconstitutional, illegal, and a violation of the federal fair housing act,” said Stark.
In January, TENNY hopes to get its wish. That’s when the case will be argued at the New York State Court of Appeals (the state’s highest court). “Perhaps we can start fresh,” said Stark, “and give some clearer guidance to the legislature about what they have to do, and force them to actually take action.”
Tax Equity Now New York (TENNY) sued New York State and City claiming that the property tax structure violates the Constitution and various tax laws. For more information check their website.
