REAL ESTATE
AND
(Copyright, 1918, by The Record and Guide Co.)
NEW YORK, MARCH 9, 1918
HEARING HELD AT ALBANY ON BOYLAN TAX BILL
Little Chance of Flat Tax Rate Measure Passing in Present
Form—Amendments Overcoming Defects To Be Introduced
(Special to the Record and Guide.)
Albany, March 8.—Sentiment in the
Legislature cannot be construed wholly
as favoring the Boylan Bill, which
would limit the real estate tax in New
York City to $1.75 on each $100 of
assessed valuation and would impose a
personal property tax of 25 cents per
$100. The proponents of the bill declare
it to be absolutely necessary to relieve
the heavily burdened real estate in New
York City.
It was learned tonight that the bill is
to be amended so as to provide some
means of obtaining the true valuation of
personalty in New York City and taxing
it; if not at the rate of 25 cents per $100
at some rate which will insure a lower¬
ing, or at least no increase, in the realty
tax rate. In its amended form a hear¬
ing will be given the bill some day next
week, the date to be fixed later, at which
representatives of the New York City
Tax Department, the Real Estate Board
and other organziations interested will
be heard. It is certain that the bill as it
now stands, limiting the realty tax to
$1.75 per $100 of assessed valuation, will
not be passed. The Legislature will not
at this time attempt to fix this maxi¬
mum, and the prospects are that nothing
but a campaign of education, designed
to acquaint each member with the true
inwardness of the taxation problem in
New York City, could accomplish this.
It can be stated definitely that the in¬
troduction of the bill will accomplish
this—namely, the initiation of some form
of taxation of personalty that will serve
to lift some of the burden from the real
estate in the Metropolis.
The gauge of the Legislature on the
Boylan Bill is illustrated by the follow¬
ing interviews :
Senator Elon R. Brown: "I will not
discuss the matter."
Senator Robert F. Wagner: "The bill
will not be reported in its present form,
but it has some good points."
Senator Edward F. Dowiing:^ *'It
seems practicable, but personalty is an
elusive entity.'*
Senator John V. Sheridan: "Per¬
sonally I believe the measure has the
support of real estate owners in New
York City, but I doubt its ability to pass
It this time. I know this—that some-
hing must be done to relieve the already
too heavily burdened real estate owner.
[ know of cases where real estate
Dwners have been impoverished and
Forced to submit to the sale of their
property for unpaid taxes by reason of
:he rising scale of realty taxes."
Senator CuUen: "I am not on the
:ommittee which has the bill and could
lot discuss it."
Assemblyman Charles D. Donohue,
Tiinority leader in the lower house:
"The principle of the bill looks good, but
[ fear it would not be practicable. In
spite of the imposing array of figures its
proponents declare it will raise, it is
nevertheless a fact that no one has ever
been able to lay his finger oa that
elusive thing known as personal prop¬
erty."
Assemblyman Franklin Judson, chair-
nan of the Assembly Committee on
raxation: "I do not understand as yet
what the bill aims to accomplish, but I
will make a study of it when it comes
ap."
Assemblyman Peter D. McElligot: "I
RGCORD AND GUIDB
have not been able so far to give the
bill any great study."
It is likely that a meeting of real
estate organizations and taxpayers will
be called within the next few days by
the Real Estate Board of New York to
discuss amendments to the bill.
Robert E. Dowiing, president of the
City Investing Company, appealed to the
Legislature to protect real estate inter¬
ests against the city administration. Mr.
Dowiing said in part:
"We look to the Legislature to protect
us, not only against the tendency of New
York City administrations to favor cer¬
tain classes of residents at the expense
of the real estate interests, but against
almost revolutionary extension of gov¬
ernmental power in new directions such
as the proposal for municipal trading.
"Some of the men who make these un¬
just demands on the city administration
to get something for nothing are single
taxers, but others do not believe in prop¬
erty rights at all. They would take our
property away from us if they could.
"You have got to protect the city from
the people of the City or New York or
they will take it away from you and
wreck it.
"I have heard all I want to hear about
Home Rule. We had 130,000 Socialists
voting down there last autumn. You have
got to protect the city from the revolu¬
tionary elements in certain parts of the
city. They want to take away personal
property. They do not believe in prop¬
erty, anyhow. That is what they are after
in their municipal trading schemes.
Unequal Taxation.
"Between 57th and 89th streets, on
Fifth avenue, there are twenty private
residences, each containing from $2,000,-
000 to $3,000,000 of personalty which does
not pay one cent of taxes. Yet it is given
the same protection by the city as the
property owner in Third avenue, who is
taxed to the limit of his capacity. There
are individuals in New York with
$5,000,000 of personal property in their
homes on which they pay no tax.
"My conviction is, gentlemen, that if
you put this tax of twenty-five cents per
SlOO on personal property New York
City will have so much money that real
estate will not have to pay even the $1.75
proposed in this bill, but rather will pay
onlv $1.50 real estate assessment."
"The Boylan and Seeselberg bills are
companion measures." said A. C. Pley-
dell, Secretary of the New York Tax
Reform Association. "They propose to
do two things in connection with taxa¬
tion in the City of New York: First, to
limit the rate on real estate to $1.75 a
hundred dollars, and. second, to tax per¬
sonal property, both tangible and in¬
tangible, without deduction for debt or
exemption, at the rate of 25 cents a
hundred dollars (2^^ mills). The second
provision is intended to supply the de¬
ficiency in revenue which would result
from the limitation on the tax rate on
real estate.
"As to the limitation of the rate on
real estate. In round figures, the tax
rate this year will be about $2.36 per
hundred dollars on both real and per¬
sonal property, varying in the different
counties. This will raise nearly
$200,000,000. The remainder of the Bud¬
get comes out of the general fund-
licenses, special taxes, water rents, etc.
A rate of $1.75 on real estate only would
raise about $145,000,000. This would
leave about $55,000,000 to be raised by
taxation, other things being equal. To
raise this sum from personal property
at the rate of 25 cents a hundred dollars
will require an assessment of $22,-
000,000,000. This is two and one-half
times the amount of the present real
estate assessment, which is $8,300,000,000.
The present personal property assess¬
ment is only $250,000,000, most of such
property being taxed under special laws.
"The bill provides that personal prop¬
erty, both tangible and intangible, in the
city shall be taxed without deduction or
exemption. This would tax all the per¬
sonal property which is now classified
under the special tax system; for in¬
stance, the personal property of banks,
trust companies, mercantile and manu¬
facturing corporations, real estate mort¬
gages by whomever held—all of which
is now exempt from local personal prop¬
erty taxation, because of the payment
of special taxes. This would, of course,
be a double tax. But even if all such
kinds of personal property are as¬
sessed, it is incredible that $22,000,000,000
would be placed on the assessment rolls.
"If, on the other hand, it is not in¬
tended to tax personal property which
is under these special laws and the bill
should be changed in this respect, then
about the only kinds of personal prop¬
erty that would be affected would be
that of public service corporations
(which now largely escape assessment
because of the offset of bonded indebt¬
edness) and personal property in the
hands of individual merchants and on
consignment. The bill would repeal the
existing exemption of $1,000 on house¬
hold furniture and of savings bank de¬
posits, and also the exemption of funds
of charitable and religious organiza¬
tions. But the aggregate of personal
property of this character that would be
reached would fall far short of providing
the millions of dollars of necessary
revenue.
"As to the general principle of tax
rate limitation. Such a limitation as is
proposed in this bill is highly undesir¬
able because it absolutely ties the hands
of the local authorities. The debt service
now takes about seventy cents of the
present tax rate. Should the $1.75 limit
be in operation no retrenchment could
be made on the debt service and the
difference between $1.75 and the present
rate would mean a reduction in the
amount available for city expenses.
Similarly, should the State Direct Tax
be increased, the amount available for
ordinary city purposes would be still
furtlier curtailed.
"In addition, this is not the time to
agitate for a large reduction in taxes
on real estate. Taxes on all other classes
are going up and are likely to increase
still further on account of the war, and
of the war taxes, a smaller proportion
is falh'ng on real estate, as such, than
on other classes, while rents are
going up.
"The present high rate on real estate
is in part due to abnormally low rates
in the past, resulting from the city pay¬
ing for large public improvements by
bond issues. Now that these bond issues
have to be met, the tax on real estate
is naturally increased, but the purpose
of these improvements was to add to
real estate values.
(Continued on page 288)
IS IN ITS FIFTIGTH YEAR OF CONTIIVUOUS PUBLICATION.