New York City Plans 7 Percent Hike In Property Tax By 2009

September 23, 2008 5:45 a.m. EST

New York, NY (AHN) - To counter the effects of the global financial crisis on New York City, Mayor Michael Bloomberg said Monday he is considering increasing the property tax by 7 percent in January.

The move is expected to hike city coffers by $600 million. With Wall Street firms' finances on a downtrend, the city's revenue is expected to decline as well since 10 percent of its tax revenues comes from Wall Street companies.

At a news conference, the mayor admitted the planned property tax increase will be unpopular, but he said the city is left with little choice except to do it. The proposal needs the approval of the City Council.

"I said we will look at the different possibilities, but I think the solution is a combination of expense reduction, which nobody is going to be happy about and revenue enhancements, which nobody is going to be happy about," Bloomberg said.

Under the proposal, the property taxes of residents of cooperatives or condominiums with 11 or more units will go up to $358 from $308 yearly, while owners of one- to three-family homes will see an average additional $226 tacked in their tax assessments.

Prior to the major Wall Street crisis, New York City already had a projected city budget deficit of $2.3 billion for fiscal year 2010. "If you take a look at what happened over the last couple of weeks and what is likely to happen to our economy that may not be the size of the deficit... It may be greater than that," Bloomberg warned.

Bloomberg jacked up the city's property taxes by 18.5 percent in mid 2002, which caused his approval ratings to plummet. He made it up to Big Apple residents by granting a 7 percent property tax reduction in 2007.

The city mayor said he doubted New York could still afford to continue with the 7 percent property tax cut beyond July 2009. But Bloomberg assured residents the $400 property tax rebate mandated by state laws will remain.