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Legislative Memo

Ken Pokalsky
Vice President of Government Affairs
T 518.465.7517 x205
www.bcnys.org

BILL:

S.1706-A (Oppenheimer)

Support

SUBJECT:

Commercial Real Estate Assessment Ratio in Westchester County

 

DATE:

June 25, 2009

 

The Business Council opposes this legislation that is intended to unjustifiably shift Westchester County's property tax burden from single-family homeowners to commercial property owners and the owners of cooperatives and condominiums.  It does so without providing the safeguards to protect the interests of all taxpayers, as provided for in other sections of the Real Property Tax Law (Articles 18 and 19).

While we appreciate concerns about the impact of ever increasing real property tax burdens on individual taxpayers, this bill does nothing to address the root causes of the state's uncompetitively high real property taxes.  Instead of cost-shifting proposals such as this, State government needs to limit mandates on local government, and local government needs to address high cost factors such as employee benefits, duplication of services, and others.

This bill will have adverse impacts on Westchester County businesses, making it more difficult for them to compete with commercial real estate in neighboring counties.  Likewise, this bill will provide a disincentive for companies to invest in Westchester County real estate, since they will be unable to attain the same return on investment as they will be able to attain in neighboring areas.

When higher rents (because of higher taxes) are passed along to tenants in commercial properties, there will be an incentive for tenants to move to neighboring areas.  The improper and dramatic shift of the tax burden to commercial properties will therefore have a ripple effect throughout the Westchester economy.

This bill is a dramatic departure from existing law that, except in limited circumstances, all properties are to be assessed at a uniform percentage of value (Real Property Tax Law Sec. 305).

Whatever perceived evils this bill is purporting to address can in fact be addressed appropriately by the remedies available in existing law; that is, a municipality may conduct a revaluation of all property and may adopt the homestead provisions set forth in RPTL Article 19.

Likewise, this bill will adversely impact residents of cooperative and condominium apartments.  Instead of being taxed on the same proportionate share of market value as single-family homeowners, they will pay taxes at a higher proportionate share of value.  Since cooperatives and condominiums comprise the real “affordable housing” in Westchester County, this bill will have a significant negative impact on this important segment of the housing market.

For these reasons, The Business Council opposes Senate approval of S.1706-A.