By state law, taxes for homes in Class 1 are assessed on 6 percent of what assessors believe to be their market value, while co-ops and condos in Class 2 are assessed at a rate of 45 percent of potential rental income. But the way the city Department of Finance (which is responsible for calculating market value based on formulas set by the state) arrives at that value for the two property types is not consistent.

For Class 2, city finance officials compare co-op values to the income of nearby rental properties, vastly undervaluing what the property would be worth if sold. Because of the age and location of many co-ops, their taxes are often assessed based on comparisons to rent-regulated buildings, exacerbating the value discrepancy.

Ana Champeny of Citizens Budget Commission (CBC), the fiscal watchdog, gave an example: “You look at the value that [Department of Finance] determined based on state law and it’ll be something like...$600,000, but when you look at how much the person paid when they bought that unit, they would have paid something like $3 million.”

In May 2018, after years of criticism that New York City’s property tax system lacks equity, Mayor Bill de Blasio and City Council Speaker Corey Johnson announced they would empanel a commission of “blue chip” experts to explore the issue. Its tasks are to examine everything from the way different property values are assessed to relief for vulnerable homeowners, solicit input from the public and specialists, and make recommendations for reform.

Because of the laws and practices governing New York property taxes, the recommendations will inevitably include some changes that can be enacted by the city and others that would require action in Albany, both of which would upset a longstanding and largely unchallenged system. Even coming up with recommendations has proven fraught.

One of the central problems is the vast under-assessment of many owner-occupied cooperatives and condominiums, which have experienced sweeping growth in property values over the past two decades, but are taxed instead based not on their market value but on the much lower income they would likely make if they were rentals. Homeowners, in general, pay a lower effective tax rate (taxes as a percent of sales prices) than commercial and residential rental property owners, according to the Citizens Budget Commission, a fiscal watchdog.

Natasha Amott used to have three well-known boutiques packed with cooking supplies, from unique cocktail bitters to high-end Japanese knives. Now her Whisk empire is down to a single store.

One closed in April for a familiar reason. Amott's landlord wanted to raise the monthly rent for her Williamsburg location to $26,500 from $18,450 because of how hot the retail market is on the Bedford Avenue thoroughfare. Amott was unable to afford the higher price and the store joined scores of others around the city shuttered by rent hikes.

But a less familiar factor — one partly in the city's control — forced Amott to give up on Whisk's Flatiron location just last month: Rising property taxes.

The numbers show "substantial" and "steady" increases in property taxes that hit business owners in their balance sheets, according to Ana Champeny, the director of city studies at the Citizens Budget Commission, a fiscal watchdog and research group.

"This growth is going to put a strain on retail businesses as most leases pass along the property tax escalation, so their annual increase would be not just their increase in base rent but also in their property tax," Champeny said.

New York spends billions of dollars a year on economic development.

A report earlier this year from the nonpartisan and nonprofit Citizens Budget Commission put the total state and local incentive spend at just under $10 billion for 2018.

That money goes in many different directions, to projects big — think the Buffalo Billion — and small. But year after year, one of the state's biggest incentive packages funds something you can find with your TV remote or favorite streaming service: the Empire State Film Production Credit.

Managed by Empire State Development, the state's film tax credit offers $420 million a year to entice TV shows and movies to film here in the state.

How it works: The state gives movie and TV studios 30 cents for every $1 spent on production around the New York City area. Upstate, the state reimburses an additional 10% for qualified labor costs.

The $3 million in annual tax offsets to the Elmont and Sewanhaka school districts from the $1.2 billion development of the 43 vacant acres at Belmont Park, juxtaposed against a Wyandanch School District twice-defeated school budget, exposes the growing problem facing Long Island’s underfunded school districts that lack a commercial property tax base to provide tax revenues to support over taxed residential taxpayers.

The result for Wyandanch is that it will be firing as many as 100 employees including teachers, teaching assistants, administrators, bus drivers and security guards, impacting Wyandanch’s obligation to meet the New York State Constitution requirement that all New York schools must provide a “sound basic education” to their children.

New York Courts have defined a “sound basic education” as preparing students to meet their civic responsibilities such as jury duty, while also providing skills that will prepare them for life-long learning and the ability to access jobs. Without sufficient financial resources, Long Island’s underfunded school districts, such as Wyandanch, are challenged to meet these constitutional, legal, and educational standards.


The overriding issue is that Wyandanch is not alone. According to the Citizens Budget Commission, nine other Long Island school districts, Hempstead, Brentwood, Central Islip, Roosevelt, Freeport, Westbury, Copiague, William Floyd and Uniondale are underfunded. That represents 8 percent of Long Islands 124 school districts. Something is wrong when New York State spends over $27 billion towards education with more than $3 billion for Long Island schools.

It's been a year since the Gov. Mario M. Cuomo Bridge opened, and lots of folks have been since preoccupied with hating its name.

Now they have another thing to focus on: the New York State Thruway Authority's new Toll Advisory Panel, announced July 10. Its mission: to review toll rates, potential resident and commuter discount programs and commercial vehicle rates on the Governor Mario M. Cuomo Bridge. The last Thruway toll increase was in 2010.

To the fury of many commuters and public officials, the Thruway Authority on July 10 announced meetings on the subject of the tolls would be held the following week and at a time when anyone who commutes would have trouble getting there — from 4:30 p.m. to 7:30 p.m.

Back in 2017, as the bridge construction was getting well underway, a venerable New York fiscal watchdog group predicted the toll on the new bridge over the Tappan Zee would double. The basic $10 hit would be necessary to pay for the cost of the bridge's construction, said the Citizens Budget Commission. While high, it's less than the $14 initally rumored. It's also less the cost of the George Washington Bridge, which is $15 (with E-Z Pass, $10.50 Off-peak/ $12.50 peak).

Gov. Andrew Cuomo has a strong record when it comes to vetoing the Legislature’s “benefit sweeteners” for state employees, and this year he has 19 more giveaways to kill.

Sweeteners grant union members new benefits without the union having to negotiate for them: They’re a pure gift to a special interest. The nonpartisan Citizens Budget Commission tracks these bills every year, and its latest report explains in detail why all 19 bills are losers for the general public.

If Cuomo signed all 19, the cost would total more than $71 million in the first year — and that’s without accounting for the seven measures passed without the (supposedly required) cost estimate.

Which is just one sign of how unseriously the Legislature takes its duties to the public on this front. Another sign: Cuomo vetoed three of these same bills — all increasing eligibility for disability pensions in fiscally strapped Nassau County — just last year.

Other bills boost eligibility for other benefits for various cops, court officers, firefighters and so on here and there across the state; award costly new privileges, such as granting a right to demand binding arbitration, and so on.

Again, every union is free to raise these issues come contract time — and offer concessions to pay for the added benefits.

Cuomo vetoed all 12 sweeteners that reached his desk last year. We join the CBC in urging him to keep up that tradition in 2019.

Francis Lewis High School in Queens has a 207% utilization rate, making it desperately overcrowded.

While the number of overcrowded schools in New York City has declined by 31 buildings since 2015, some 520,000 kids–roughly half of the city’s student population–attend schools that are oversaturated and ill-equipped to handle their student bodies. The worst overcrowding is happening in Brooklyn, Queens, and the central Bronx. Overall, there are 1.1 million students in 1,840 schools in 32 districts across the five boroughs. Some students are forced to learn in Transportable Classroom Units (TCUs), trailers placed outside main school buildings, in order to make sure there is enough space for everyone. The city has been trying to fix this problem for years.

According to a July 9 report from the Citizens Budget Commission (CBC), the current need for school expansion already exceeds the 83,000 seats that the Department of Education identified to be built to reduce crowding.

Mayor Bill de Blasio’s new 2019-2024 capital plan includes nearly $8.8 billion for school capacity projects to be started over the next five years. However, the plan does not contain an updated estimate of seats needed–while residential development, rezoning projects, and other trends will change the need in certain sub-districts.

Some days, it can be hard for Arthur Goldstein to walk down the hallway of Francis Lewis High School in Queens, where he teaches English as a second language. Goldstein’s school is one of 25 overcrowded schools in the 26th school district, and has a utilization rate of 207 percent, according to a 2018 Department of Education report.

“There are some days when I think I’m going to go to this office and I turn around and walk to another office because it’s just too much work to get through walking down the hall that way,” Goldstein said. “I don’t know if you can even imagine that, but that’s happened to me more than once.”

Francis Lewis High School has a capacity of about 2,400 but enrolls closer to 4,600, Goldstien said. Those students are some of about 520,000 students — nearly half the city’s school population — in the city who attend an overcrowded, also known as over-utilized, school, according to a Citizens Budget Commission (CBC) report released July 9. Those students attend roughly 618 schools, with the worst overcrowding in Brooklyn, Queens, and the central Bronx. Overall, there are roughly 1.1 million students in 1,840 schools in 32 school districts across the five boroughs, according to the Department of Education.

While the CBC report said crowding may lessen as enrollment citywide declines and, overall, the number of crowded school buildings has declined by 31 since 2015, others have expressed concern that the problem will get worse because the current need is already greater than the 83,000 seats the Department of Education has identified to be built to reduce crowding. In 2017, Mayor Bill de Blasio added 57,000 seats to the 2015-2019 capital plan to meet the 83,000 need seat estimate.

Here’s another way the city public-school system wastes millions: by insisting on building new schools even as whole buildings sit empty.

A new study by the watchdogs at the Citizens Budget Commission estimates the Department of Education could cut capital-spending plans by $2.4 billion, saving at least $150 million a year in debt service, if it dealt more rationally with school overcrowding.

The changes aren’t rocket science, but as basic as, to quote the CBC report, “rezoning, re-purposing available seats, and altering admissions policies.”

From 2005 to 2018, the DOE spent $9.1 billion on new schools that yielded an extra 98,302 seats. Yet it still lists 618 of its 1,413 schools as overcrowded.

Its $17 billion capital plan for FY 2020-2024 includes $1.7 billion for 28 projects in 11 school districts that have unused capacity. And, in an era of declining enrollments, it aims to build five new high schools for $966 million — spending that’s unneeded if it just repurposed existing space for far less cash.

Politics play a role here: Parents don’t like rezoning, and connected builders and unions score big from school-construction jobs.

And no politician will pass up the chance to show for a ribbon-cutting at a “new, state-of-the-art” public school.

Plainly, all that counts for more than doing right by the kids, and the taxpayers.

New York City could save more money if it used alternative strategies to tackle overcrowding in the city’s public schools instead of constructing new buildings, a new report found.

The Citizens Budget Commission -- a nonpartisan non-profit civic organization that works to achieve constructive change in the finances and services of New York City and New York State -- released a report on Tuesday titled “Cut Costs, Not Ribbons.”

“Construction of new schools is slow, expensive, and not always well targeted to ameliorating crowding,” the report said. “More flexible and cost effective approaches, including rezoning, re-purposing available seats, and altering admissions policies, are underused by the DOE. New school construction should be used only when alternative strategies are inadequate.”

Here’s another way the city public-school system wastes millions: by insisting on building new schools even as whole buildings sit empty.

A new study by the watchdogs at the Citizens Budget Commission estimates the Department of Education could cut capital-spending plans by $2.4 billion, saving at least $150 million a year in debt service, if it dealt more rationally with school overcrowding.

The changes aren’t rocket science, but as basic as, to quote the CBC report, “rezoning, re-purposing available seats, and altering admissions policies.”

From 2005 to 2018, the DOE spent $9.1 billion on new schools that yielded an extra 98,302 seats. Yet it still lists 618 of its 1,413 schools as overcrowded.

Its $17 billion capital plan for FY 2020-2024 includes $1.7 billion for 28 projects in 11 school districts that have unused capacity. And, in an era of declining enrollments, it aims to build five new high schools for $966 million — spending that’s unneeded if it just repurposed existing space for far less cash.

Politics play a role here: Parents don’t like rezoning, and connected builders and unions score big from school-construction jobs.

And no politician will pass up the chance to show for a ribbon-cutting at a “new, state-of-the-art” public school.

Plainly, all that counts for more than doing right by the kids, and the taxpayers.