Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: [v. 101, no. 2608: Articles]: March 9, 1918

Text version:

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.