New York City Hall
What to watch for this week in New York politics:
Mayor Bill de Blasio returned to the city on Sunday evening after spending two days campaigning in New Hampshire. The mayor continues to struggle to drum up support for his presidential campaign and has yet to meet the donor threshold for the next Democratic primary debate, which will be held in September. But he may receive a much-needed boost when he appears at a CNN town hall to discuss his campaign on Sunday, August 25.
As is usual in August, things are slow at the New York City Council, which has no more committee hearings or votes scheduled for the rest of the month. Last week, the Council passed several bills, including a massive package of reforms to the city's public benefit system.
On Wednesday, the New York State Public Campaign Financing Commission will hold its first meeting. The commission was created during the state budget negotiations earlier this year and is expected to craft a plan for publicly financed state elections, similar to the system currently used New York City's municipal elections. The nine members of the commission were named by Governor Andrew Cuomo and state legislative leaders last month.
In the city, we continue to wait for NYPD Commissioner James O'Neill's decision regarding Officer Daniel Pantaleo, whose use of a banned chokehold led to the death of Eric Garner five years ago. Pantaleo has been suspended without pay since an NYPD administrative trial judge ruled that he should be removed from the force. On Sunday, the New York Times reported that the judge had found Pantaleo to be "untruthful" in his explanations to investigators about Garner's death. Commisioner O'Neill has said he will arrive at his decision before the end of the month.
There are several events to be aware of - see our day-by-day rundown below.
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The run of the week in detail:
Monday
Governor Cuomo is in Albany and New York City with no public events scheduled.
Mayor de Blasio appear on NY1's Inside City Hall during the 7 and 11 p.m. hours.
Tuesday
At 1:30 p.m. Tuesday, the NYC Board of Elections will hold a commissioners meeting.
At 2 p.m. Tuesday, the Real Estate Board of New York will host “The New Rent Laws - What We Know AND What We Don't Know with Rose & Rose Law.”
At 7 p.m. Tuesday, CannaGather will host a “Congressional Update & Cannabis for Autism” event with U.S. Representative Carolyn Maloney.
Wednesday
At 9 a.m. Wednesday, the Urban Land Institute will lead a tour of the East Side Access Project, “one of the largest transportation infrastructure projects currently underway in the United States. East Side Access provides new, direct Long Island Rail Road (LIRR) service into a new concourse below Grand Central Terminal on Manhattan’s East Side, reducing commutes into Manhattan by up to 40 minutes.”
At 9:30 a.m. Wednesday, IDNYC will hold a hearing on proposed changes to the IDNYC program, at which members of the public can share their feedback. The proposed amendments “provide for a streamlined card renewal process. Among other things, these amendments also allow existing cardholders to update their address, including at renewal, without requiring them to present original residency documents.”
At 1 p.m. on Wednesday, the New York State Public Campaign Financing CommissionPublic Campaign Financing Commission will hold its first meeting at the CUNY Graduate Center.
At 2 p.m. Wednesday, the NYC Department of Transportation will hold a public hearing.
At 5 p.m. Wednesday, this week's Max & Murphy show on WBAI will focus on the 30th anniversary of David Dinkins' election as mayor in 1989, and include an interview with Dinkins and another with journalist Tom Robbins, who covered Dinkins in the '80s and '90s. Tune in at 99.5FM or wbai.org.
At 6:30 p.m. Wednesday, City & State NY will host its 2019 Brooklyn Power 100 reception, “gathering top brass from government, advocacy, academia, media, business and beyond for a networking opportunity you do not want to miss.” Speakers will include Brooklyn Borough President Eric Adams and U.S. Representative Hakeem Jeffries.
Thursday
At 6 p.m. Thursday, TransitCenter will host Can Riders Trust the MTA Reorganization?, “a discussion of the MTA reorganization plan and what New York can learn from comparable transit agency restructurings in London, with insights from former Transport for London executive Leon Daniels, PCAC Executive Director Lisa Daglian, and Reinvent Albany Senior Analyst Rachel Fauss. If you want to understand what’s in the MTA reorganization plan and what it means for NYC’s transit system, you won’t want to miss it.”
At 6:30 p.m. Thursday, the American Planning Association New York Metro Chapter will host The Political and Social Cost of Advancing Equity, an event providing “a space to discuss the emotional, physical, and professional stresses people of color and other professionals from underrepresented groups face when advancing equity.” Speakers will include Hafizah Omar, senior associate at Living Cities; Justin Garrett Moore, executive director of the Public Design Commission; and Naim Brown, director of place-based investment at Urbane Development.
At 7 p.m. Thursday, the Manhattan Young Democrats will host its 11th Annual Young Gets It Done event “where you can party with 300+ young professionals, recognize incredible young progressive honorees, and meet your elected representatives!” Among the honorees are state Senator Alessandra Biaggi, managing partner of Arena Ravi Gupta, and others.
Friday and the weekend
At 10 a.m. Friday, Mayor de Blasio may make his weekly appearance on WNYC’s The Brian Lehrer Show. On Sunday at 7p.m., the mayor will appear at a CNN town hall to discuss his presidential campaign.
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by Joey Fox and Samar Khurshid
@GothamGazette
Joe Borelli, center (photo: John McCarten/City Council)
Joe Borelli, the Republican City Council Member from Staten Island’s South Shore, has made a name for himself as one of the most vociferous pro-Donald Trump supporters in the president’s home city. But, Borelli is a realist and knows that Trump is unpopular in very-Democratic New York, and that the Republican Party has a lot of work to do to regain a foothold in city or state government after several disappointing elections.
During a wide-ranging interview on the Max and Murphy podcast, Borelli said the New York GOP, now under new leadership, must focus on rebuilding locally around the state and looked ahead to the party’s chances in the 2020 state and federal elections, the 2021 New York City mayoral race, and the 2022 state elections that will include the next race for governor. He also touched on his own admittedly quixotic campaign for New York City Public Advocate, where he’s running this year in a special election to unseat incumbent Jumaane Williams, what the party’s message should be, and how the New York GOP should approach Trump’s long shadow.
“The new chairman, Nick Langworthy, would do a better job by focusing on the county executive races, the county legislative races, where we can dominate,” Borelli said of the new state chair, when asked about the next race for governor. “Having those competitive races upstate, with good candidates, has an effect on the gubernatorial race.”
For governor, “The Republican Party needs someone in the batter’s box, someone who can hit home runs,” Borelli said, meaning someone with star power who can overcome the daunting voter registration odds that are better for the GOP statewide than in New York City, but still create a steep uphill battle for the first Republican statewide win since Governor George Pataki won a third term in 2002.
The party needs to keep building a bench, but also needs to find candidates for governor and mayor that can far outperform the baseline numbers, Borelli acknowledges. Many point to recapturing control of the state Senate as a pressing need, while Langworthy has said his top goal is winning the 2022 governor’s race.
It’s certainly not only upstate that should matter to New York Republicans, for if they only dominate there, they will still be out of power when it comes to the governor’s office or even the state Senate, which had been the GOP’s last statewide stronghold until last November’s elections swung it to Democrats by a fairly wide margin.
Citing the special election that will likely be called early next year to replace current Queens Borough President Melinda Katz, who is in line to become Queens District Attorney, Borelli said that it’s “a seat where Republicans have not ran credibly in the past. I think identifying those seats where we can run a good race, where it’s worth it to have a Republican on the ballot, is one of the things that we could certainly do.”
Queens City Council Member Eric Ulrich, who along with Borelli and Staten Island’s Steven Matteo make up the Council’s only three Republicans in 51 seats, is expected to run in the special election. Ulrich is significantly more moderate than Borelli and has been highly critical of Trump, but many Republicans acknowledge they must embrace candidates like Ulrich to have a chance in urban and suburban areas.
“Giving each locality or region of the state the autonomy to make these kind of party direction decisions is something Nick Langworthy has to do,” Borelli said.
Borelli believes Democrats in New York City have created an opening for moderate Republican candidates.
“If there are people who are disaffected with progressive activists, I’m not saying they’re gonna be Republicans, but they might be New York City Republicans. They might entertain a Mike Bloomberg again. They’re not gonna entertain me for mayor,” he said, “and I don’t expect them to. I don’t think that’s a realistic proposition. But they might entertain a moderate mayoral candidate at some point who is more back-to-basics.”
Borelli said that he’s seen some evidence that this is already happening, especially with voters of color. “The Republican Party has long talked about rebuilding and attracting new voters. I think that, not since we’ve had Mayor de Blasio has there been the actual opportunity to do so. The mayor is the most uniting mayor we’ve ever had – no matter where you go, people don’t seem to like him…He has opened up opportunities for us to attract new groups.”
The Republican Party should “look at [voters of color] as who they are outside of their ethnic identity, and try to find common ground where they care about,” according to Borelli. He cited controversial local issues such as the SHSAT, school discipline, property taxes, and the minimum wage where Republicans could find common ground with Democratic voters, no matter whether those voters are “black, brown, or purple.”
Most important to Borelli is simply reasserting the Republican Party as the main alternative to Democrats in New York.
“When you talk about opposition to Cuomo, most often, you in media, you’re talking about his left flank, and you’re talking about the Working Families [Party], and some labor unions,” Borelli said. “The GOP under [former Chairman Ed] Cox, the failure was not to offer a viable alternative. Even if a lot of voters don’t think that alternative is great, I think the bigger failure was not being the major opposition party in the state.”
“Bringing the state GOP as the opposition group, so that disaffected people gravitate this way instead of that way, I think is more important than hedging our opinion on any issue,” Borelli added. [LISTEN to the full interview]
A Race Borelli’s “Not Gonna Win”
Amidst his many proposals for Republican revitalization, Borelli also spoke of his own upcoming November election against Williams, a Brooklyn Democrat, for Public Advocate -- a race about which Borelli has no delusions.
“I’m running in a race I’m not gonna win, let’s be frank,” Borelli said. “This is a really uphill fight, it’s a 7:1 or 6½:1 Democratic enrollment, so I’m doing this because I enjoy doing it, and I enjoy beating a drum a little differently than the other guy.”
The big difference, Borelli says, is that he would actually be a public advocate who holds the mayor accountable, whereas Williams is more aligned with de Blasio, even if Williams has been critical of the mayor at times.
Borelli wants to give what is currently a relatively powerless office far more influence. “The charter doesn’t say much of must, the Public Advocate must, right? It doesn’t give them the great seal of the exchequer, or something like that. It’s no guidance. The Public Advocate may do this, should do that, could do that.”
Among the changes Borelli has proposed are to give the office oversight of the Department of Investigations and a seat on several powerful boards, such the MTA’s.
“If that doesn’t happen” Borelli said, “then I would support…revising the office itself, and that would mean to eliminate it.”
“The only function of the job is to be a bully pulpit and direct your bullseye...on the mayor,” Borelli said. “And I think it’s better to have someone who fundamentally disagrees with most stuff the mayor does.”
“As the Public Advocate, I could do a pretty good job of treating [Mayor de Blasio] as my punching bag,” he says, echoing a message Ulrich used in the February nonpartisan special election, that Williams won, where Ulrich came in second. The only merchandise that Borelli’s website is currently selling is a series of t-shirts and stickers featuring de Blasio’s face and a red line crossing it.
Borelli acknowledges that he’s having a hard time raising significant funds for the campaign, or even asking for them, and that Republicans generally concentrate on mayoral races in New York City, at the expense of others like for public advocate or comptroller.
“I’m not always right. I’m OK admitting that,” he said. “But I think someone should be addressing things from an alternate point of view and offering an alternative vision for the city.”
Donald Trump’s Long Shadow
Borelli, who was co-chair of Trump’s campaign team in the 2016 New York primary, said that he’s sticking by Trump despite his many controversies.
Asked about how he reconciles support for some of Trump’s policies and judicial appointments, why he isn’t among the conservatives who say they simply can’t support Trump because of his morals, ethics, and behavior, Borelli said, “In my brain I can separate the two.”
“When I’ve disagreed with the president on both policy and on personality, I’m not someone who toes the line,” Borelli continued. “They have not asked me to be on the advisory board for 2020…probably because I don’t toe the line all the time. I think you measure every president on the balance of whether they’re doing good or bad.”
He said Trump’s policies are good for New York, especially economically. “On balance, a lot of us just can ignore the things we disagree with.”
Is he OK telling kids Trump is the moral leader of the country and someone they should look up to, Borelli hedged, saying there’s something about the office of the presidency to respect, and said “I’m not as offended as most people on most things,” he said.
“We’re sick of being called racists,” he said of Trump supporters. “Do you know how many times a day I get called a racist? It’s almost mind-numbing...It’s almost entrenching on our side, when you get called deplorable, and a racist, and every -ism imaginable, because you have a difference of opinion. It almost entrenches you into that bubble.”
After seeing 2018 Republican gubernatorial nominee Marc Molinaro hedge on his support for Trump, Borelli said he wishes people in his party would be more direct in their opinions on the President, whatever they may be.
“Just be pretty brutally honest about how you feel. If you don’t like Trump, say it. If you like Trump, say it, and come what may.” He added, “I’m not saying there wouldn’t be an electoral cost to it.”
Molinaro repeatedly stated throughout his campaign that he had not voted for Trump (he said he wrote in former New York Congressional Rep. Chris Gibson), but was mostly hesitant to explain why or criticize Trump during the campaign, and Cuomo repeatedly tied Molinaro to Trump.
In spite of his strong support for Trump, Borelli characterized himself as a “moderate.” He clarified, “I think I would be billed as a conservative” by others. “Although, hey, I swing some ways on some issues.”
2020, 2021 and Beyond
2018 represented a drubbing for New York Republicans, with the party losing three Congressional seats and eight state Senate seats (along with the majority in both chambers). But according to Borelli, 2020 gives the party a clear chance to rebound.
“Four [state] Senate seats -- I think that’s a realistic goal,” Borelli said of how many seats Republicans can and should recapture next year, when the entire Legislature is on the ballot, along with Trump. “I think it’s a possibility. It still doesn’t bring us to the promised land, but I think that’s enough of a pendulum swinging back, and a check on sort of the movement of the far left, that it would build a better mousetrap for at least two years in the state.”
“I think,” he continued, “you’d have people like [Senate President] Andrea Stewart-Cousins saying, ‘let’s pump the brakes on some of the stuff that we’re doing, because it’s clearly not playing well in the Hudson Valley,’ for example.”
On the subject of Congress, Borelli’s predictions were even more specific. He singled out Max Rose, his home borough’s Democratic Congressman, as uniquely vulnerable.
“Yeah, 100%, [Max Rose is beatable],” Borelli said when asked if newcomer Rose could be defeated. “He’s certainly beatable on the ground level, and he’s certainly beatable in the metrics they consider in Washington. The resulting action of that is going to be a lot of money spent on each side. He’s really doing an incredible job raising money, credit where credit is due. It will be tough for whoever the Republican nominee is to beat him, but there’s a chance.”
The leading Republican in that race is Staten Island Assemblymember Nicole Malliotakis, whom Borelli did not mention by name, though he briefly criticized her 2017 mayoral campaign, and whom he has not endorsed. Borelli had given some consideration to joining the congressional race, but opted against it and ran for public advocate instead.
Borelli also raised several Upstate congressional seats he thinks Republicans can hold or retake, and said that after a tough 2018, having Trump at the top of the ticket in 2020 is likely to help certain Republican candidates.
Looking even further into the future, Borelli said he could see Molinaro running for governor again in 2022, when Cuomo is planning to seek a fourth term, but he also mentioned Congressional Rep. Lee Zeldin, who is attempting to win what is likely a tough reelection campaign next year, as someone he’d like to see consider a run for governor.
And Borelli predicted that Republicans may have to wait another six years to have a shot at the New York City mayor’s office. In 2021, he said, “there’s going to be so much attention, so much public financing, on the five or six, or however many it ends up being, Democratic candidates that it will be very difficult for a Republican to win. I say that with the full knowledge that I’ll be out there, probably supporting whoever we run, trying my best to get him or her elected, but it is an uphill race.”
In 2025, however, “when you have an incumbent who’s going to get beat up in a primary, and then you are the sole opposition person against them in the general, I think that’s an easier race.” He referenced Republicans beating Mayor David Dinkins in his bid for a second term in 1993, and said that in the future, the Republican pitch to voters in the city has to be about the cost of living and the cost of doing business.
“You can get very far when you have someone like Bill de Blasio, knocking Bill de Blasio,” Borelli said when asked about the Republican vision and pitch. “But you’re right; I think it always is going to be harder for conservatives to formulate a vision of the future, because in essence, conservatism is the preservation of the status quo. I don’t mean that in any racial or whatever ‘isms’ you want to throw at me, I mean that that’s the nature of the conservative mindset.”
As for his own 2021 plans, Borelli has a bold plan in mind. “I’ll say it right now: if I win for Public Advocate, I am running for mayor. Don’t ask, just pack your bags and come on the ride with me. I’m going to Gracie. If we somehow eke out this incredible win, then put me on the list.”
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by Joey Fox, Gotham Gazette
@GothamGazette
City Council Member Joe Borelli (photo: John McCarten/City Council)
August 14, 2019 - Max & Murphy Podcast: The Future of the New York Republican Party
City Council Member Joe Borelli, a Staten Island Republican and strong supporter of President Donald Trump, joined the show to discuss his candidacy for Public Advocate and the present and future of the New York Republican Party.
Listen to the conversation and let us know what you think -- we're on Twitter @TweetBenMax and @JarrettMurphy. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts, under "Max & Murphy," and listen to Max & Murphy live on Wednesdays at 5 p.m. on WBAI radio, 99.5FM or wbai.org
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by Ben Max, Gotham Gazette
@tweetBenMax @GothamGazette
Mayor de Blasio & Comptroller Stringer (photo: Benjamin Kanter/Mayor's Office)
Amid the larger discussion about addressing climate change before it’s too late, debate is raging in New York over whether government-run and -affiliated pension funds worth hundreds of billions of dollars and responsible for payments that support hundreds of thousands of retirees should divest from fossil fuel company stock.
Advocates, elected officials, and others have been pushing at the city and state levels for full divestment so that the pension funds are not supporting or tied to companies that are leading contributors to greenhouse gas emissions, a warming planet, and the negative consequences of climate change.
But some officials have warned, and practiced, caution, putting forth arguments that the primary priority of pension fund investment must be return for current and future retirees, and that it is important not to overly politicize investment decisions, especially given how uncertain the future is and that some of the leading fossil fuel companies are at the front lines of figuring out the renewable energy future.
There’s also the argument, often made by State Comptroller Thomas DiNapoli, that by remaining invested with fossil fuel (and other) companies, it is possible as activist investors to help shift their behavior. And while New York City Comptroller Scott Stringer often espouses and practices that philosophy, when it comes to fossil fuel company divestment, Stringer has worked with Mayor Bill de Blasio, labor union leaders, and others to move city pension funds toward dropping stake in those companies.
The New York City and State pension fund pictures are significantly different, with responsibility at the state level much more concentrated in DiNapoli’s office than the city’s in Stringer’s. But the different approaches being taken by the two Democratic comptrollers, who are the popularly-elected chief fiscal officers of their respective jurisdictions, show divergent paths in this particularly fraught political, financial, environmental, and existential moment.
While he’s one of a number of key decision-makers, Stringer is pushing full speed ahead toward fossil fuel divestment by the city pension funds. DiNapoli, meanwhile, has cautioned against that approach, even criticizing it as overly political and reactionary, while taking his own steps to diversify investments, experiment with a carbon-free energy stock portfolio, and push fossil fuel companies toward new policies.
Advocacy groups like Fossil Free New York and New York Communities for Change are pushing for the $210-billion state pension fund, known as the Common Retirement Fund (CRF), to divest from fossil fuel companies completely. The CRF has about $13 billion in fossil fuel-related investments, according to Fossil Free New York.
In April 2018, as the Democratic primary in his bid for a third term was heating up, Governor Andrew Cuomo declared the state’s pension fund should divest from fossil fuels. But in New York the Governor does not control the pension fund; the State Comptroller is the sole fiduciary of the CRF and, as such, has final say over when investments are made and retracted.
While he took that stance, Cuomo has not made divestment a major focus, applying minimal pressure to DiNapoli to take more aggressive action. His office recently told Gotham Gazette that the governor is working with the DiNapoli on a path toward divestment, in large part through an advisory group they established together.
Advocates did celebrate in March of this year when Cuomo took a significant new step, calling on state agencies and authorities such as the Metropolitan Transportation Authority (MTA) to examine divesting whatever funds they have in fossil fuel companies.
“As part of the Green New Deal, Governor Cuomo directed State authorities, public benefit corporations, and the State Insurance Fund, which collectively hold approximately $40 billion in investments, to study divesting from fossil fuels. They are reviewing and evaluating the feasibility and appropriateness of such a measure,” Jordan Levine, a spokesperson for Cuomo, said in a statement to Gotham Gazette.
The governor’s office was unable to identify at this time how much of that $40 billion is currently invested in fossil fuel companies.
Back in early 2017, DiNapoli and Stringer both argued that engaging with major fossil fuel producers like ExxonMobil as shareholders would yield better results than immediate divestments.
However, in 2017, Stringer and the five municipal pension funds initiated an analysis of their investments’ carbon footprint in 2017. Then, in January 2018, after the study concluded, Stringer changed his stance. He, Mayor de Blasio, and other pension fund board members announced their plan for three of the five pension funds (the police and firefighter pension funds are not currently part of the plan and account for less than a third of total pension assets). The city’s five funds have about $5 billion invested in fossil fuel producers out of almost $211 billion in pension fund investments.
In a celebratory announcement that month alongside de Blasio and others, Stringer asserted that he and other city pension fund trustees “would be shirking our fiduciary duty if we were not exploring all options to address climate risk.”
An involved divestment process is underway, at least at three of the funds -- the Comptroller and the Mayor have seats on the boards of all five pension funds but cannot make unilateral or even bilateral decisions about their investments.
State Response - DiNapoli and His Critics
Under considerable pressure to divest state pension funds from fossil fuel companies, in April 2018, Governor Cuomo and Comptroller DiNapoli convened the Decarbonization Advisory Panel to study the issue. In April of this year, the panel released its report, which made several recommendations and put forward “examples” of what the comptroller could do to mitigate the fund’s carbon footprint. However, the report was criticized by climate activists like 350.org’s Richard Brooks for not including a timeline or benchmarks to achieve divestment.
But even before the panel was assembled, DiNapoli had been taking steps around the question of divestment, creating a $10 billion portfolio of investments into green companies. “We’ve done a lot already to allocate money to climate solutions,” DiNapoli said during a May interview on The Capitol Pressroom with host Susan Arbetter, “they’d like to see us do even more there.”
But the comptroller’s stance has caught the ire of local climate activists, who are the ones who want him to “do even more,” as the comptroller put it. Pete Sikora, the climate and inequality campaigns director at New York Communities for Change, said the comptroller “continues to finance the climate crisis.”
“Not to be too sarcastic, but if you’re going to finance evil stuff that destroys our future, you'd hope the state would at least make - not lose - money off it,” Sikora said, noting that the energy sector “continues to trend down over a decade...of industry under-performance.”
“It’s simply insane to not divest, and losing money on the proposition makes it even more absurd,” said Sikora.
Despite growing pressure from activists and lawmakers on the issue, DiNapoli has maintained that his more moderate approach is what is in the best interest of the CRF and its members. He believes that implementing standards such as the ones suggested in the panel’s report will naturally lead to fossil fuel investments being phased out over time and would avoid the negative impacts of wholesale divestment.
In a June 2019 interview with WAMC’s Capitol Connection, DiNapoli said “when we make judgements about where to put the pension fund, we put it in the best interests of the state.” He went on to defend his approach in significantly more harsh terms than the mild-mannered and reserved DiNapoli typically uses.
Some state lawmakers disagree with the comptroller’s assessment and want to force the his hand on the issue.
The Fossil Fuel Divestment Act would require the CRF to withdraw all investments in the 200 largest fossil fuel companies. The FFDA sets a five-year deadline for this to happen and would allow the comptroller to stop or reverse divestment if it can be demonstrated that it would significantly hurt the CRF’s value.
Senator Liz Krueger, a Manhattan Democrat and the FFDA’s prime sponsor in the state Senate, said in a statement that while the proposal did not pass during this year’s legislative session, she “continue[s] to have conversations with my colleagues about the importance of” the bill. She also added that she is “working on amending the bill based on testimony we heard, both to make it stronger and to address various concerns that were raised.”
“With all due respect to the Legislature, for the Legislature to start micromanaging the pension fund is a recipe for disaster long-term,” DiNapoli said on WAMC, adding that “it may be climate change today, but what will it be tomorrow?”
DiNapoli has previously divested the pension fund from gun companies following the 2012 Sandy Hook Elementary School shooting and from the private prison industry over concerns about the treatment of immigrants and people of color in 2018. Both are cited by critics who want the comptroller to act more decisively on fossil fuel companies.
Krueger said she “strongly believe[s] that [DiNapoli] is wrong on divestment” when it comes to fossil fuels, while noting that they “have talked about divestment extensively” and the comptroller has “been a long-time champion of the environment and climate action.” Despite their talks, “neither of us have managed to convince the other,” she said.
Krueger criticized DiNapoli’s “strategy of engagement with major fossil fuel producers like ExxonMobil” for not “providing any consequences when they repeatedly brush him off. It’s time for some consequences.”
“New York should begin the process now or our retirees will be left holding the bag,” Krueger concluded.
“Does anybody think if we sell the stock tomorrow that’ll make the air cleaner? No,” DiNapoli said during the WAMC interview.
“Since it's become clear that Comptroller DiNapoli currently lacks the moral and fiduciary courage to stand up to the fossil fuel industry and Wall Street, this legislation is necessary,” said Sikora, referring to the Fossil Fuel Divestment Act, in an interview with Gotham Gazette.
“It’s clear we have our work cut out for ourselves in both houses,” said Sikora, assessing the bill’s likelihood of passage next session, which begins in January. During the last session, the FFDA had 28 sponsors in the 63-seat Senate and 37 in the 150-seat Assembly.
DiNapoli plans to follow the advisory panel’s recommendations. According to the DAP’s report called the Climate Action Plan, “rather than making a narrow recommendation to divest from specific stocks, the panel supports the concept of minimum standards to guide the fund in its decisions to sell securities and/or avoid investment managers whose operations and strategies are not sustainable.”
The report argues that divestment from unsustainable companies is “baked in” to this plan of action and that the fund will only invest in sustainable assets by 2030.
The panel’s report says that the CRF should have a minimum standard for where its funds are invested. The panel recommends that the criteria for these minimum standards be set through contracts, but only gave “examples” of what the standards could be, such as requiring “an appropriate corporate governance system for the management of climate-related issues” and “a lobbying policy actively supporting government actions to address climate change.”
The report also suggests examples of actions and timeline that the comptroller’s office could pursue, including “excluding all companies that derive more than 10% of revenue from mining thermal coal or account for more than 1% of global production” by 2020 and “if less than 5% decreased in [greenhouse gas] emissions year on year after” several engagements then “consider a shareholder resolution.”
When DiNapoli released the climate action plan, Fossil Free New York called it “a weak plan at a time when we need bold and transformative action,” and said it is “lip service and incrementalism.” The advocacy group further said “the plan includes no benchmarks, no firm delivery deadlines, no parameters to measure companies’ actions, and doesn’t even commit to divest from thermal coal companies, including ones on the edge of bankruptcy.” FFNY supports the Fossil Fuel Divestment Act.
On WCNY’s The Capitol Pressroom in May, DiNapoli said his opposition to divestment stemmed from his responsibility as fiduciary of the state’s pension fund, saying “this is my job, it’s what I was elected to do.”
He also brought up his 2018 reelection, in which he received more votes than he did in 2014, while Mark Dunlea, the Green Party candidate who campaigned almost exclusively on pension divestment from fossil fuel companies, did worse than the previous Green Party nominee when DiNapoli sought reelection in 2010.
“I actually feel that those in the broader public who’ve looked at this issue are more on our side,” the comptroller said. DiNapli’s Republican opponent in the race, Jonathan Trichter, criticized the comptroller from the right, saying he was playing politics by making the moves he had to explore divestment and create the Sustainable Investment Program, in which $10 billion of pension assets are invested in low-emissions or green companies.
Ceres, a sustainability nonprofit, praises Comptroller DiNapoli as “a global leader in the fight against climate change, addressing material risks and pursuing opportunities for the Fund’s investments.” Ceres supports the “active” investor strategy that DiNapoli has claimed is a better path forward than divestment.
During a debate last fall, Dunlea claimed “if we divested a decade ago, we’d have about $22 billion in the state pension fund,” referring to a 2018 assement from Corporate Knights. A competing unions-funded study said the opposite.
While there are competing studies, Bloomberg News reported recently that some private investment funds are beginning to divest themselves from fossil fuel producers, based solely on the financial risks involved.
DiNapoli regularly notes that while he is the sole fiduciary, he does not make his decisions alone by a long shot, with a chief investment officer, a board of advisors, and others who help determine all aspects of pension fund management. On The Capitol Pressroom, DiNapoli said he was unfairly being singled out by activists and other critics, while also noting that New York City was still in the study phase and that two of the five city pension funds had not agreed to divest.
“So the pressure on me is that we guarantee retirement security for the 1.1 million members of the pension plan, which is a lot of pressure,” DiNapoli said.
New York City Divestment
City Comptroller Scott Stringer has changed course from his previous stance and is now leading an initiative to divest the city’s pension funds from fossil fuel companies, although he is encountering his own challenges in doing so.
“New York City is planting the seed for a clean, green, and thriving economy that can truly support future generations,” Stringer said in a statement to Gotham Gazette. The city has “taken this first-in-the-nation step toward divestment to protect both the retirement security of our city’s workers and the future of our planet,” the comptroller added.
The plan announced by Stringer and Mayor de Blasio in January 2018 set a goal of total divestment within five years. As of July 2019, the city is still in the planning stages, having sent out a request for proposals (RFP) for financial advisors to come up with a divestment strategy last December. The comptroller will select a plan to move forward by December 1 of this yea. But, a key wrinkle in the process is that two of the city’s five municipal pension funds are not on board with divestment as of now.
Unlike the state pension fund, New York City’s public employee pensions are not unified under one system. Instead, there are five separate funds, each with their own boards. In total, the pension funds account for over $195 billion in assets. The largest is the New York City Employees Retirement System (NYCERS), which handles the pensions for most municipal employees.
There were two pension funds for the city’s education-related employees, the Board of Education Retirement System (BERS) covers most non-teacher civil service employees of the city’s school district, while the Teachers’ Retirement System (TRS) is for educators employed by the Department of Education, CUNY, or charter schools in the city. The NYPD and FDNY each have their own pension funds, the Police Pension Fund (PPF) and Fire Department Pension Fund (FDPF), respectively.
Also unlike the state pension fund, each of the five funds has its own board and the city comptroller is not the sole fiduciary of the funds. Each board has its own composition requirements. The Mayor or a mayoral appointee sits on all five boards, as does the city comptroller. The Public Advocate sits on the NYCERS board. Also, relevant city officials sit on some of the boards, such as the Police Commissioner on the PPF board and the schools chancellor on the BERS board.
The NYCERS board includes a mayoral appointee, the comptroller, the Public Advocate, and the five borough presidents, along with representatives from labor unions including AFSCME, the Teamsters, and the Transport Workers Union, which are the three unions with the most members in the fund.
Primarily, pension fund board members are representatives of pension-eligible employees. Eight of the twelve board members for the both the PPF and the FDPF are either union leaders or elected representatives of pension fund members.
In 2017, all five pension funds initiated a study of climate change’s effects on their funds, which was led by the comptroller’s office. However, a year later, the police and firefighter pension funds did not join the other three funds in announcing plans to divest from fossil fuels.
The PPF and FDPF’s bylaws both require a seven-twelfths majority of the board to take action on anything, such as a divestment proposal. The comptroller and mayoral appointees on both boards fall far short of having the votes to divest without buy-in from at least some of the union leaders or employees.
In a statement, Sikora praised the comptroller, along with Mayor de Blaiso and other trustees, for “taking real action to fight the climate crisis and we look forward to complete divestment.” Sikora also said that New York Communities for Change is “satisfied with the progress to date” of the city’s divestment plan.
The Patrolmen’s Benevolent Association and the Uniformed Firefighters Association did not respond to repeated requests for comment regarding their positions on the city divestment plan.
***
by Andrew Millman, Gotham Gazette
@millman_andrew @GothamGazette
Ben Max contributed to this article.
New York City Hall
What to watch for this week in New York politics:
The week begins with many eyes on the apparent death by suicide of Jeffrey Epstein in federal prison in Manhattan, news of which broke on Saturday morning. While conspiracy theories are swirling, Mayor Bill de Blasio and many others are calling for a full investigation. Federal prosecutors who were bringing a child prostitution case against Epstein said that the "conspiracy" case against Epstein's alleged co-conspirators would move ahead.
De Blasio was in Iowa over the weekend, as was Senator Kirsten Gillibrand, and many other members of the Democratic presidential primary field -- it was the Iowa state fair, among other key events on the primary campaign schedule. De Blasio and many others also spoke at a "gun sense" candidate forum hosted by former Mayor Michael Bloomberg and the gun control organization he founded, Everytown for Gun Safety, and spinoff groups like Moms Demand, whose leader, Shannon Watts, co-moderated the event. De Blasio continues to draw small crowds for his own campaign stops, though he has been making the rounds on cable TV news, from this past week's appearance on Fox News' Sean Hannity to Sunday stops on CSPAN, CNN, and MSNBC.
The mayor has been pushing hard for $1 donations in his attempt to make the September debate stage based on rules set by the Democratic National Committee, calling in favors with allies -- from Orthodox Jewish leaders to labor unions -- to reach out to their community members to ask for donations to de Blasio, and noting that no endorsement or other commitment is involved.
As the Iowa forum indicated, this week will see continued attention on the issue of gun violence around the country and in New York City.
Also back in the city, we're awaiting more news on the fate of NYPD Officer Daniel Pantaleo, whom an NYPD administrative judge has said should be removed from the force for misconduct in the death of Eric Garner. The decision will lie with Commissioner James O'Neill, who may not yet have the full paperwork from the attorneys involved that will allow him to trigger his decision-making process. De Blasio has promised resolution this month.
Perhaps most pressingly this week, the Child Victims Act takes effect across New York, including a one-year "look back" window that allows child sex abuse survivors to bring civil lawsuits against their alleged perpetrators. A major push will begin this week from advocacy groups, service providers, legislators, attorneys, and others to make sure that New Yorkers know about the CVA and its provisions.
As usual in August, there are not that many specific political events on the calendar, though there are some -- see our day-by-day rundown below -- highlighted by a City Council Stated Meeting, where bills are passed and introduced, and by the annual City & State NY education summit.
***Do you have events or topics for us to include in an upcoming Week Ahead in New York Politics?
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The run of the week in detail:
Monday, August 12
Mayor de Blasio returns to New York City from Iowa on Monday. In the evening, he'll appear on NY1's Inside City Hall during the 7 and 11 p.m. hours.
Governor Cuomo has no events on his public schedule for Monday.
At 10 a.m. Monday, Lieutenant Governor Kathy Hochul will deliver remarks at the opening of Dunkirk Pier and Harbor.
At 10:30 a.m. Monday, City Council Speaker Corey Johnson will appear on WNYC’s The Brian Lehrer Show.
At 1 p.m. Monday, there will be a “Harlem Mothers S.A.V.E. Rally to Stop the Flow of Illegal Guns” calling on federal officials to stop the flow of illegal guns into New York from other states, at the Javits federal building. Comptroller Scott Stringer, Brooklyn Borough President Eric Adams, and Manhattan Borough President Gale Brewer will be among those who participate.
At 5:30 p.m. Monday, Brooklyn Borough President Eric Adams will be on News12 for his monthly “Ask the Borough President” session.
At 7 p.m. Monday, the Manhattan Democratic Party will host its 2019 Judicial Convention, at which “the Judicial Delegates elected on June 25th will convene in order to elect the Democratic nominees for two New York Supreme Court seats that will appear on the November ballot.”
Tuesday, August 13
At the City Council on Tuesday:
-At 11 a.m., the Committee on Housing and Buildings will meet to discuss a new bill concerning relocation expenses incurred by the Department of Housing Preservation and Development.
-At 12 p.m., the Committee on General Welfare will meet to discuss eleven bills concerning accessibility and transparency at the Department of Social Services. A resolution calling on the state government to provide a grace period for SNAP benefits will also be introduced.
At 10 a.m. on Tuesday, the New York City Board of Standards and Appeals will hold a public hearing.
At 10 a.m. Tuesday in Times Square, “Safe Horizon - the largest victims service organization in the country - will unveil a wide ranging public awareness campaign in Times Square to educate adult survivors of childhood sexual abuse about their rights under the newly enacted Child Victims Act. The launch will debut a video and ad PSA campaign featuring survivors, including New York State lawmakers: Senator Alessandra Biaggi, Assemblymember Yuh-Line Niou, Assemblymember Catalina Cruz, and Assemblymember Rodneyse Bichotte. Clear Channel has generously donated digital billboard space. The launch will happen the day before a one year window opens, allowing survivors to sue their abusers or liable institutions, no matter how old they are or how long ago the abuse happened. The window closes on August 14th, 2020. Survivors who were 23 or older on the day the bill was signed (February 14th, 2019) must take advantage of the window if they want to seek justice in the courts...Safe Horizon has launched a comprehensive website on the new law that answers frequently asked questions and provides guidance for survivors seeking legal assistance.” Lieutenant Governor Kathy Hochul, Assemblymember Linda Rosenthal, and others -- including the aforementioned legislators and other survivors -- will also participate in Tuesday’s event.
At noon Tuesday, Comptroller Tom DiNapoli will attend the University of Albany School of Education Inaugural Summit, at the Albany Convention Center.
The latest episode of the What’s The [Data] Point? podcast from Gotham Gazette and Citizens Budget Commission will post on Tuesday afternoon and feature an interview with New York City Charter School Center CEO James Merriman about the charter school sector in the city, the sector’s relationships with Mayor de Blasio and Governor Cuomo, and more.
At 6 p.m. Tuesday, Queens Borough President Melinda Katz will host an India Independence Day Celebration at Queens Borough Hall.
At 6:30 p.m. Tuesday, Empire State Indivisible will hold a team meeting, joined by state Senator Julia Salazar and Assembly Member Yuh-Line Niou, “who will give us some inside info on how we can best prepare for 2020!”
Wednesday, August 14
At the City Council on Wednesday:
-At 10 a.m., the Committee on Finance will meet to discuss three land use applications, as well as a resolution concerning “changes in the designation of certain organizations to receive funding in the Expense Budget.”
-At 10:30 a.m., the Subcommittee on Zoning and Franchises will meet to discuss two land use applications in Brooklyn.
-At 10:45 a.m., the Committee on Women and Gender Equality will meet to discuss a resolution in support of the Violence Against Women Reauthorization Act of 2019.
-Also at 10:45 a.m., the Committee on Land Use will meet to discuss five land use applications.
-At 1:30 p.m. in the Council Chambers, the City Council will hold a stated meeting at which bills that have been voted through committee are passed by the full Council and new bills are introduced. It will be preceded, as usual, by a pre-stated press conference led by Council Speaker Corey Johnson.
At 8:30 a.m. on Wednesday, BetaNYC will host a bagel breakfast briefing with the NYC 311’s Open Data Team to “learn about 311 datasets available to the public, discuss impacts to the datasets from a recent system upgrade, talk about future work, and answer your questions.”
At 10 a.m. on Wednesday, the City Planning Commission will hold a public meeting.
At 11 a.m. Wednesday in Manhattan outside Supreme Court, “A rally will be held demanding that the Archdiocese of New York, Diocese of Brooklyn and Diocese of Rockville Centre help survivors of clergy sexual abuse in New York, consisting of several survivors, their attorneys, and supporters of survivors of clergy sexual abuse. Survivor Lexington Filipowski will speak after he files his lawsuit under the new New York Child Victims Act. Filipowski will be one of the very first survivors to file a lawsuit under the CVA. Participants will hold signs that describe how they have been hurt by child sexual abuse by a clergy member. Participants will also have the opportunity to speak if they wish. No one will be identified by name unless they wish to be identified.”
At 4 p.m. Wednesday, the Civilian Complaint Review Board will hold its August public board meeting. “Participants will have the opportunity to ask questions about police-community relations and learn about key Agency updates. Investigators will be available to receive complaints of misconduct.”
At 5 p.m. Wednesday, this week’s Max & Murphy show on WBAI radio will feature a long, in-depth interview with City Council Member Joe Borelli, a Staten Island Republican, about his campaign for Public Advocate, and the status and future of the New York GOP. Tune in at 99.5FM or wbai.org.
At 11 p.m. Wednesday, Mayor de Blasio will appear on The Daily Show on Comedy Central.
Thursday, August 15
From 9 a.m. until 4 p.m. Thursday, City & State NY will host its 2019 Education Summit, offering “industry executives, public sector leaders and academics the opportunity to share ideas and debate critical issues such as school choice, closing the achievement gap, and school safety.” Speakers will include DOE Chancellor Richard Carranza; state Senators John Liu, Shelley Mayer, and Toby Ann Stavisky; Council Members Donovan Richards and Mark Treyger; Assembly Member Michael Benedetto; and many others.
At 10 a.m. Thursday, the NYC Campaign Finance Board will hold a board meeting.
At 6:30 p.m. Thursday, Riders Alliance will hold a happy hour for better transit, with state Senator Michael Gianaris.
Friday, August 16
Mayor de Blasio may make his weekly appearance on WNYC’s The Brian Lehrer Show at 10 a.m. Friday.
***
Have events or topics for us to include in an upcoming Week Ahead in New York Politics? E-mail Gotham Gazette executive editor Ben Max any time: This email address is being protected from spambots. You need JavaScript enabled to view it. (please use "For Week Ahead" as email subject).
***
by Joey Fox and Ben Max
@GothamGazette
(photo: @arenasummit)
In last year’s state elections, several progressive first-time candidates emerged as Democratic primary challengers to members of the State Senate’s Independent Democratic Conference, an erstwhile bloc of more moderate Democrats who had long been seen as a roadblock to reform on many fronts. Most of the IDC challengers were successful and some of their campaigns were aided in part by Arena, a group that launched after the 2016 presidential election and now aims to train the next generation of Democratic campaign staff.
For three days this week, Arena -- a national group launched by veterans of the Barack Obama and Hillary Clinton campaigns, among others -- will bring its training academy to New York City to impart lessons on everything from campaign management and communications to finance and candidate preparation. A sign of Arena’s growing clout and the value of the training it is offering, the session is drawing several likely mayoral candidates and other high-profile political figures.
“Arena was started right after Trump was elected, and our mission is to lower the barriers to entry in politics,” said Ravi Gupta, co-founder and managing partner. “So we want to make politics accessible for everyday people to get involved, whether that's running for office or working on campaigns or volunteering.”
Starting on Thursday, Arena will hold three days of training sessions in campaign management and communication at Convene, an event space in Downtown Manhattan.
The event will be headlined by former Secretary of State and Democratic Presidential nominee Hillary Clinton, and attended by at least three likely 2021 mayoral candidates – Comptroller Scott Stringer, City Council Speaker Corey Johnson, and Brooklyn Borough President Eric Adams. Arena has been talking with all three campaigns about possibly hiring its academy graduates and expects to send staffers to other potential mayoral contenders as well, not to mention campaigns for a variety of other races in the 2020 and 2021 election cycles.
Also in attendance on Thursday will be Emily’s List Vice President Christina Reynolds, Manhattan District Attorney candidate Alvin Bragg, recent Queens District Attorney candidate Tiffany Cabán, and VoteMama Founder and former NY-2 congressional candidate Liuba Grechen Shirley.
The organization, which is a 501c(4) and makes electoral endorsements, is also launching a New York-focused project called “Five Borough Future,” which aims to promote government reform and city autonomy through advocacy, grassroots movements, and electoral campaigns. The academy is one part of the initiative, along with a policy platform and a six-month fellowship program for activists, non-profit leaders and potential candidates. Arena has a slew of prominent Democratic operatives and former officials on its board, including veterans of the Obama, Clinton and Sanders campaigns, but also former Maryland Governor Martin O’ Malley, former Congressional candidate Suraj Patel, and DNC director of states Allison Zelman.
In 2018, the organization supported 37 candidates across the country – all but one were first-time contenders. Of those, 35 won their primaries and 21 won in the general election, according to Arena.
In New York, the group worked on nine campaigns, seven of which were successful, including the campaigns of now Congressional Reps. Antonio Delgado and Max Rose, State Assemblymember Catalina Cruz, and State Senators Alessandra Biaggi, Jessica Ramos, and Zellnor Myrie, all of whom defeated former IDC Senators. “We helped lead that coordinated effort with the Working Families Party, as well as we helped recruit some of them into the race like Alessandra Biaggi, for example,” Gupta said.
“At the end of 2018, we were encouraged by the results,” he continued, “But we also wanted to make sure we knew what obstacles our candidates face, whether they won or lost. And so we did a big debrief and found out that the vast majority of candidates, winning and losing, that we worked with named some form of talent issue as their number one challenge.”
That prompted Arena to launch an effort to recruit, train, and support campaign staffers through the Arena Academy. The group aims to train at least 1,000 people in 2019, and will target another 5,000 with the launch of its online academy at the end of the year. They’ve already held training sessions in Iowa and South Carolina and nearly 500 people participated between the two events, they said.
The latest one in New York will train around 70 people to work on campaigns, followed by an event in Houston, Texas and another at a location to be determined. In total, the entire effort is expected to cost around $4.4 million, Gupta said. The funds come from both the group’s membership, roughly 2,244 as of May, private donations, and an affiliated political action committee, The Arena PAC. They also launched a joint fundraising effort with Swing Left and Run for Something, groups with similar missions.
“There have been training programs out there in the Democratic Party over the years, I think what makes us different is that, number one, we make it very accessible. The majority of people will come to our trainings are people of color and women,” Gupta said. The group provides scholarships, waives attendance fees for underrepresented individuals, and also pays for flights and hotel rooms for applicants to attend its seminars, he said.
“If there's like a bunch of boot camps out there for progressives, we’re more like the West Point,” he added, noting that Arena looks to train staffers for leadership positions, like campaign manager, deputy campaign manager, communications director, and so on. This week’s training in New York City is geared mainly toward upper level positions in campaign management and communications, and will feature the two tracks, with sessions on emerging trends in media, the role of a communications director, effective delegation, budget and cashflow, and more.
The group also intends to work around the traditional gatekeeping in campaigns which, Gupta insists, doesn’t make being in progressive politics an appealing career option.
“There's no transparency in the hiring processes. So it's usually word of mouth, ad hoc, which is bad for campaigns, because it takes a lot of time and they don't get a breadth of applications and applicants in diversity,” he said. “There's not a quick process and a standard process for hiring people, there's very low-quality training, and almost no ongoing mentorship. And then when people come off campaigns, there's no place for them to go or system for them to connect to, to find the next job. And so our academy solves some of those problems.”
Besides training, Arena will also launch a career platform on August 12 to connect staffers with campaigns, simultaneously lowering costs for campaigns to hire from a broader set of applicants. They’ve already placed staffers in campaigns for many of the 2020 Democratic presidential candidates, Gupta said.
“We would view this as a failure if we just closed up after this election, whether we won or lost our critical races in 2020,” he said. “Because one of the problems we're trying to solve is building institutional memory, building a long term system so that people who roll off these campaigns in 2020 find taking campaign work appealing and transparent and predictable.”
***
by Samar Khurshid, senior reporter, Gotham Gazette
@samarkhurshid @GothamGazette
Note - this article has been updated to note that Arena's career platform will launch on August 12. It has not been launched already.
Note- this article has been updated to note an appearance by Hillary Clinton at the first day of the event.
Senator Gianaris with activists (photo: @SenGianaris)
August 7, 2019 - Max & Murphy Podcast: Senate Deputy Leader Gianaris on Gun Control, Queens Politics & More
State Senate Deputy Majority Leader Michael Gianaris of Queens joined the show to discuss gun control laws that have been passed in New York, what is ahead for state government in the next legislative session, Queens political dynamics including the result of the District Attorney primary, and more.
Listen to the conversation and let us know what you think -- we're on Twitter @TweetBenMax and @JarrettMurphy. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts, under "Max & Murphy," and listen to Max & Murphy live on Wednesdays at 5 p.m. on WBAI radio, 99.5FM or wbai.org
(photo: the governor's office)
August 7, 2019 - Max & Murphy Podcast: State Prison Policy, Parole and Reentry Programming
Liz Gaynes of the Osborne Association joined the show to discuss state prison policy, including the controversial planned closing of a Manhattan facility, reentry programming, and parole laws.
Listen to the conversation and let us know what you think -- we're on Twitter @TweetBenMax and @JarrettMurphy. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts, under "Max & Murphy," and listen to Max & Murphy live on Wednesdays at 5 p.m. on WBAI radio, 99.5FM or wbai.org
***
by Ben Max, Gotham Gazette
@tweetBenMax @GothamGazette
Gay
Mayor de Blasio (photo: Rob Bennett/Mayor Bill de Blasio
This is the third and final part of a three-part series on New York City's antiquated and unfair property tax system, its complications and inequities, the underway task of reforming it, and prospects for the future.
Read part one - Taking on the Difficult Task - here.
Read part two - Deep and Complex Inequities - here.
**********
When Mayor Bill de Blasio and Council Speaker Corey Johnson announced the creation of an advisory commission to come up with reforms to the city’s antiquated property tax system (much of which is controlled by state law), they said their focus would be on fairness while maintaining the city’s largest revenue stream.
The revenue from New York City property taxes was a whopping $27.8 billion last year, roughly a third of the city budget, and it helps fund everything from basic government administration and social services to the mayor’s signature initiatives like universal pre-kindergarten, including the salaries and benefits of hundreds of thousands of municipal workers.
Property owners see their taxes rise every year, squeezing nearly everyone -- though not evenly or fairly. Elected officials across the board have expressed interest in changing the system. But to make a more rational property tax system and still fund extensive city services at or near their current levels, officials will have to navigate the murky waters between the public interest and that of each individual taxpayer.
How skillfully that is done will dictate the political consequences that follow, and whether promised soon-to-be-proposed reforms to the property tax system actually have a chance to pass through the New York City Council and State Legislature.
‘A Substantial Constraint’
“One of the hard things about the whole property tax system: changing things is always going to impact someone else. If you move things for one tax class -- because we’re trying to stay revenue neutral -- it inevitably means changes for a different tax class,” Marcy Miranda, a spokesperson for the mayor’s office, told Gotham Gazette.
Some experts have asked why, if the commission’s purpose is to create a more fair and equitable system, is it constrained by the mandate to leave the city’s revenue untouched?
“It is definitely a substantial constraint. And I think that is being driven more by city fiscal concerns than it is by questions of how to structure the tax and what is the best tax,” Ana Champeny of Citizens Budget Commission told Gotham Gazette.
Roughly two-thirds of the city’s revenue comes from taxes, a little under half of which is property taxes. During a panel discussion about economic growth in New York City in May, former Commissioner of City Planning Carl Weisbrod said the city’s vast provision of social services and recent changes in federal tax policy mean, “increasingly, we are dependent on our own ability to generate revenue.”
Mark Shaw, co-chair of the city’s property tax commission, the initial recommendations from which are expected soon, views the revenue mandate as a gesture to those anxious about the prospect of reforming a system so integral to private and public life in New York.
“The veil of revenue neutrality over the debates for the commission is actually a way of making it clear to any of the interested parties of the public that this is not a back door way of trying to increase property taxes,” Shaw told Gotham Gazette.
But the mayor’s executive order establishing the commission, which reflected an agreement with the City Council, does not mention revenue neutrality, exactly. It only says the commission’s recommendations “shall not result in a reduction of revenue.”
The Frozen Tax Rate
State law sets the property tax classes, along with the assessment standards and growth caps, but the city -- the City Council with the mayor’s approval -- controls the tax rate. Since fiscal year 2009, the mayor (Bloomberg, then de Blasio) and City Council have agreed to keep the overall tax rate frozen. Because of very strong growth in the city’s real estate market, however, property taxes have continued to rise and generate more and more revenue.
This has allowed the city budget to grow significantly over the past two decades. Spending under Mayor Michael Bloomberg reportedly rose 31.6 percent above inflation during his three terms in office. Since de Blasio took office, the city budget has grown by more than $20 billion overall, up to the $92.8 billion expense budget for the current fiscal year.
“If the tax commission came up with reforms that adjusted the assessed values, the Council and the mayor could set a tax rate that didn’t have a revenue implication for the city, but it might raise the rate,” said Champeny of CBC.
Given how sensitive the subject of taxation is in New York City, raising the tax rate could come with political fallout. “Obviously that would be pretty unpopular if someone were to come in and make that change,” said Miranda from the mayor’s office.
The rates the city sets on the assessed value of the property in each class, known as the “class shares,” are supposed to adjust each year to reflect changes in the market but growth caps set by the state limit how much a class share can increase, according to Champeny. The city has the discretion to redistribute any increases above the cap to other tax classes.
In most years recently, the City Council has requested lawmakers in Albany lower the cap for homeowners, shifting increases onto commercial and utility properties. “The class shares protect [homeowners] slightly but also there’s been sort of this political choice by elected officials in the Council and the state Legislature -- and the mayor to some extent because they don’t oppose it -- to make sure that the levy growth does not fall too much on Class 1,” Champeny said, referring to one- to three-family homes.
“Each annual adjustment doesn’t necessarily shift a lot, but over ten, twenty years, it does accumulate,” she added.
Balancing the Equation
The purpose of the Advisory Commission on Property Tax Reform is to weigh all of these factors -- equity, rationality, what the state controls and what the city can do, the unintended consequences for owners and renters, transparency in the system -- and come up with recommendations for improvement. The result could be the kind of fundamental, planned restructuring of New York taxation that some had hoped would happen following the Hellerstein case in 1975; or piece-meal, band-aide solutions like the ones New York ended up with in the years after.
“We're going to...go at the heart of the property tax problem and have a commission, working closely with the Council, to try and reform fundamentally the property tax to be more fair for everyone,” Mayor de Blasio said in April 2018 when he released the executive budget that year.
In 1975, Judge Solomon Wachtler, writing the majority opinion, was concerned with the “remarkable powers of endurance” of the practices that prompted the Hellerstein case. Their survival depended largely on the machinations of politicians and officials servicing particular constituencies, factors “none of which are particularly commendable,” he noted in his decision. Over the years, those factors have multiplied and become more interconnected. Any changes of substance now will implicate the entire system, and any balance struck toward making it “more fair for everyone,” as de Blasio said, may not be what everyone wants.
This is the third and final part of a three-part series on New York City's antiquated and unfair property tax system. Read part one - Taking on the Difficult Task - here. Read part two - Deep and Complex Inequities - here.
***
by Ethan Geringer-Sameth, reporter, Gotham Gazette
@GeringerSameth @GothamGazette
New York City Hall
What to watch for this week in New York politics:
New York and the country begin the weekend dealing with the devastating mass shootings over the weekend in El Paso, Texas and Dayton, Ohio, which came after mass shootings the weekend before in Gilroy, California and here in Brownsville, Brooklyn. There was a vigil on Saturday in Brownsville to mark one week since that incident, and there will be a vigil Monday night at Grand Army Plaza in Brooklyn to pay respects to the victims of all four shootings and to call for change.
The week also begins with the city continuing to respond to the Friday news that an NYPD administrative judge has recommended to NYPD Commissioner James O'Neill that Offier Daniel Pantaleo, whose chokehold led to the 2014 death of Eric Garner on Staten Island, be fired from the police force. It will still take some time before O'Neill can issue his decision based on the judge's recommendation. After receiving a great deal of criticism over the course of recent days and weeks (and years), Mayor Bill de Blasio on Friday called the news a step toward justice. He did not explicitly indicate that he supports the recommendation for Pantaleo to be fired, still apparently trying to toe the line where he does not 'interfere' with due process for a city employee. Pantaleo and his attorney, with the support of his union, appear set to challenge his dismissal if O'Neill follows the judge's recommendation.
De Blasio was on the presidential campaign trail throughout the weekend and into Monday -- he was in Nevada, California, and Washington, D.C. -- and is scheduled to return to the city from D.C. on Monday.
Tuesday evening will be the annual National Night Out Against Crime, where local NYPD precincts coordinate with community groups and elected officials to put on neighborhood events, denounce crime, improve public safety, and increase goodwill between police officers and residents. National Night Out comes not only just after developments in the Pantaleo/Garner matter, but also after recent incidences where New Yorkers threw water on NYPD officers, which raised questions about police-community relations.
As is often the case this time of year, there are fewer events on the political calendar as the week begins than there often are throughout the rest of the year, but there are some to be aware of -- see our day-by-day rundown below -- as well as other issues to watch, such as how the mayor and others continue to deal with recent news about the prevalence of lead paint in city schools, transitions at NYCHA and the MTA, and more. And, we're still waiting for the final word on the Queens District Attorney Democratic primary, where Melinda Katz has been certified as the winner of the recount by 60 votes, but the Tiffany Cabán campaign is challenging the dismissal of more than 100 affidavit ballots. A judge will begin looking at about 30 of those ballots on Tuesday in Queens.
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The run of the week in detail:
Monday, August 5
At about 7:45 a.m. Monday, "Governor Cuomo is a Guest on Long Island News Radio with Jay Oliver."
Mayor de Blasio will be on NY1's Inside City Hall in the 7 and 11 p.m. hours on Monday evening.
On Monday at 9 a.m. in Manhattan, “U.S. Senator Kirsten Gillibrand will deliver brief remarks and participate in a roundtable discussion hosted by Community Voices Heard (CVH) about Follow Black Women: A Survey for the Frontlines, a recent survey conducted by CVH which highlights the issues thousands of Black women across New York State care about most, including affordable housing, education, and criminal justice reform. Senator Gillibrand will be joined at the event by CVH Executive Director Afua Atta-Mensah, members of Community Voices Heard, Black women survey participants, and advocates.”
At 10 a.m. Monday at Rockefeller Center, "Lieutenant Governor Kathy Hochul Visits AT&T's Girls Who Code Camp Highlighting Importance of Closing Gender and Diversity Gaps in STEM Education and Workforce." At 2 p.m., "Hochul Visits AT&T and East Flatbush Inc's STEAM Intensive Camp Highlighting Importance of Closing Gender and Diversity Gaps in STEM Education and Workforce" in Brooklyn.
At 11 a.m. Monday, Manhattan Borough President Gale Brewer will be among those who speak at the “groundbreaking for the 14th Street Tech Training Center.”
At 6 p.m. Monday, the Brooklyn Chamber of Commerce will host the 2019 Building Brooklyn Awards, recognizing “new construction and renovation projects that enrich Brooklyn’s neighborhoods, and honor[ing] individuals who have made significant contributions that enhance business conditions and the economic climate of our borough.”
At 7 p.m. Monday in Grand Army Plaza in Brooklyn, there will be a vigil for the victims of the recent mass shootings in Gilroy, California, Brownsville, Brooklyn, El Paso, Texas, and Dayton, Ohio. Brooklyn Borough President Eric Adams and Public Advocate Jumaane Williams will be among those who participate, along with civil rights attorney Norman Siegel, New Yorkers Against Gun Violence, Youth Over Guns, Gays Against Guns, clergy leaders, and others.
At 8 p.m. Monday in Central Park, City Council Speaker Corey Johnson will deliver remarks at Shakespeare in the Park Performance of “Coriolanus.”
Tuesday, August 6
Tuesday is the annual National Night Out Against Crime, “an annual community-building campaign that promotes police-community partnerships to help make our neighborhoods safer, more caring places to live.” There will be local events around the city and state, with members of law enforcement, many elected officials, and community members enjoying activities, music, food, and remarks about reducing crime.
On Tuesday in Queens, a judge will begin examining some uncounted affidavit ballots from the recount of the Queens District Attorney Democratic primary election.
At 10 a.m. Tuesday, the NYC Board of Standards and Appeals will hold a review session to discuss appeals and hearings from all five boroughs.
At 1 p.m. Tuesday at the City Council, the Subcommittee on Landmarks, Public Siting and Maritime Uses will meet to discuss three land use applications in Queens, Brooklyn, and Manhattan.
Wednesday, August 7
On Wednesday and Thursday, City Council Member Ydanis Rodriguez, chair of the Council transportation committee, and Council Speaker Corey Johnson are hosting “the Third Annual Riders Respond Transit Tour...Throughout the tour, volunteers and elected officials will ride the subway from 6:00am. - 6:00pm! Each day we will be surveying riders and discussing concerns about the status of the stations and the rideability.”
At 11 a.m. on Wednesday, Assembly Member Latoya Joyner and Bronx Legal Services will hold a hope & healing town hall on “how Bronx schools can address childhood trauma.”
On Wednesday afternoon, the Financial Control Board will meet in New York City. State Comptroller Tom DiNapoli is among those who will attend.
At 5 p.m. Wednesday, this week’s Max & Murphy show will air on WBAI radio, 99.5 FM or wbai.org, and will feature discussion of Mayor de Blasio’s presidential campaign, his record as mayor, and more.
Thursday, August 8
At the City Council on Thursday:
-At 10:45 a.m., the Subcommittee on Zoning and Franchises will meet to discuss two land use applications in Brooklyn.
-At 11 a.m., the Committee on Land Use will meet.
At 12 p.m. Thursday, the Staten Island Chamber of Commerce and the Staten Island Advance will jointly host the 2019 Police Officer of the Year Luncheon, with keynote speaker Police Commissioner James O’Neill.
At 6 p.m. Thursday, U.S. Representative Carolyn Maloney will hold a live telephone town hall.
Also at 6 p.m. Thursday, Queens Borough President Melinda Katz will host a Pakistan Independence Day celebration at Queens Borough Hall.
At 6:30 p.m. Thursday, the Brooklyn Historical Society will host Nappy Roots: A History of Black Hair, an event “weaving the tousled history, politics and culture of black hair in America.”
At 6:45 p.m. Thursday, Be Social Change will host Public Advocate Jumaane Williams for a fireside chat to discuss “his work as the Public Advocate and how you too can leverage this unique public office to have your voice heard.”
Friday, August 9 & the weekend
Mayor de Blasio may make his weekly appearance on WNYC’s The Brian Lehrer Show on Friday at 10 a.m.
At 10 a.m. on Friday, the New York State Senate Joint Senate Task Force on Opioids, Addiction and Overdose Prevention will hold a public hearing “to hear from stakeholders on strategies for reducing overdoses, improving individual and community health, and addressing the harmful consequences of drug use.”
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Have events or topics for us to include in an upcoming Week Ahead in New York Politics? E-mail Gotham Gazette executive editor Ben Max any time: This email address is being protected from spambots. You need JavaScript enabled to view it. (please use "For Week Ahead" as email subject).
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by Joey Fox and Ben Max
@GothamGazette
(photo: Edwin J. Torres/ Mayor's Office)
This is part two of a three-part series. Read part one - Taking on the Difficult Task - here. (Skip to part three - The City's Bottom Line - here.)
Elected officials and their critics alike have decried the complexity and inequality of the state’s property tax system. They say it is layered and non-transparent, and produces disproportionate tax burdens for various populations because of technical factors that are difficult for taxpayers to understand. These can lead owners of similarly valued properties in different parts of the city to pay drastically different annual property taxes.
The rising value of a homeowner’s property can belie the struggle they may face to stay afloat and keep their homes when property tax payments also climb. For those who own rental property, when the tax burden goes up it is often passed on to renters in the form of higher rents and fees on apartments that are not rent-regulated.
The Advisory Commission on Property Tax Reform was emplaneled by Mayor Bill de Blasio and City Council Speaker Corey Johnson, both Democrats, in 2018 to examine these issues and develop recommendations to reform the system, which could implicate both city and state policy, without reducing the city’s largest revenue stream.
On the table are aspects like the way different properties are classified and assessed by the state, how statutory restrictions on tax rate growth interact with market forces, and how the city sets the tax rate. These factors have had consequences for communities of color, low-income New Yorkers, seniors, and residents in some, but not all, boroughs.
As it was in 1981, when the current system was wrought out of practices that extend to the early days of the American republic, the issue today is a political flashpoint. Property taxation affects every resident in the state, and members from nearly every interest group and political party have called for its overhaul. But some of the most outspoken critics of the system, especially certain homeowners who see their taxes go up every year, may end up responsible for an even greater share of the levy if changes are made.
Four decades ago, in Hellerstein v. Assessor, Islip, the courts found New York’s property value assessment methods, which had been in practice for roughly 200 years, to be in violation of state law. Homes were being assessed with great variability on a fraction of their sales price, while business owners were footing a much larger bill for their commercial properties. Rather than adjusting practices to assess the full value of homes, lawmakers in Albany changed the rules to allow government assessors to continue favoring certain types of property over others.
Reflecting the old order, the current system divides properties into four classes, each to be assessed and taxed differently. Statutory caps are in place to ensure property taxes payments remain stable even if market values jump. To help account for variables like income, location, and the condition of housing, tax abatements and rebates are available. As a result of the classification regime’s disparate assessment methods, discrepancies exist among residential properties, with cooperatives and condominiums greatly undervalued for tax purposes compared to other homes despite at times being worth far more.
One- to three-family homes are in Class 1 and are assessed based on comparable sales prices; in Class 2, apartment buildings, as well as co-ops and condos, are taxed based on a market value derived from the annual income earned in rent by similar, nearby units, which is usually lower than the market value based on sales price, according to property tax experts. Even within the classes, statutory caps on assessed value growth have led, more recently, to uneven tax burdens across the five boroughs because of the way the housing market has exploded in some neighborhoods more than others.
An Unfair System
Attempts have been made to address property tax inequities in New York City since the current system was adopted nearly 40 years ago, but they have failed to produce transformative results. The most notable review was led by Mayor David Dinkins in 1993.
Dinkins, a Democrat, empaneled a commission to study the issue, which released a report just days before his term ended. Its most salient recommendation was to bring the treatment of co-ops and condos closer to Class 1 properties, but years of negotiations under his Republican successor, Rudy Giuliani, led only to a temporary tax abatement for apartment owners, according to an Independent Budget Office report. (A piece in the New York Times from 1994 provides an alternative account in which the Dinkins commission made no recommendations because it could not come to a “consensus on objectives,” using the words of one of the commissioners.)
The issue has become a recurring political motif. De Blasio discussed it during his first campaign for mayor and a year later, in 2014, his Commissioner of Finance, Jacques Jiha, said he would undertake a comprehensive analysis before making recommendations to the state for change. Yet it appears the Advisory Commission empaneled in 2018 is conducting the first such review of the mayor’s tenure.
“Fairness” is at the core of the commission’s mission, largely a response to a number of related policy consequences that have become apparent over the years.
>>Property Tax Classes
Legislators in 1981 created a system that would benefit small home owners by placing them in Class 1, maintaining the relatively low assessment rates they had enjoyed for so long, while leaving commercial properties, including apartment buildings, in Class 2 with a larger share of the levy.
At the time, co-op conversions, which started in New York City in the 1920s, had begun to take place at a very rapid rate; between 1978 and 1988, roughly 242,000 rental apartments in more than 3,000 buildings had been turned into tenant-owned cooperatives, according to a New York Times report published in 1988. In order to prevent assessors from considering the value of apartments if they were to be converted, lawmakers placed co-ops and condos into Class 2 and inserted language into the state law requiring they be assessed on the net income they would earn as rentals, as opposed to their sales value.
More recently, however, in an era of acute gentrification and concentrated market value growth, the low rates on co-ops and condos has become a new variation on the unequal assessment theme that sparked the Hellerstein case. As the price of homes in booming neighborhoods has skyrocketed, taxes assessed on co-ops and condos have become an increasingly smaller proportion of their sales value.
Tax Equity Now New York, a coalition of homeowners, renters, and business groups, led by former city Department of Finance Commissioner Martha Stark, filed a lawsuit in 2017 challenging the state laws that lead to disproportionate rent burden. The group claims the neighborhoods with the greatest burdens are less affluent and more likely to be the home of large populations of people of color.
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 market value based on their 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.”
To help address this inequity, CBC argued when it testified before the Advisory Commission in November, simply put condos and co-ops in Class 1 where they belong, and assess them based on sales prices. This would also help New Yorkers understand the system’s complex arithmetic and the outcomes it produces. Because now-distant beginnings created the fractional assessment practices established by the property classification system, the particular tax-related burdens New Yorkers face often feel arbitrary.
“I think that creates a lot more mistrust, too, in the system. Which is why we said you really should put all these homes into one class and you should value them based on sales,” Champeny told Gotham Gazette.
There were a number of bills in the Legislature related to condos and co-ops that lawmakers were apprehensive about taking up because of uncertainty about changes to the classification system, according to Assemblymember Galef.
“We want to see where the commission comes out on that one so those bills won’t be addressed this year,” Galef told Gotham Gazette in May before the legislative session ended. (The Legislature passed, and the governor has yet to sign, a two-year extension of a property tax abatement program for co-ops and condos, but nothing to address the structure of the real property class system.)
When everyone is a stakeholder, though, upsetting the long held fractional assessments would mean some people will have to pay more, and that is likely to include the high value co-ops and condos now enjoying low rates. As in the past, this will inevitably be a difficult pill to swallow. In a letter to the Advisory Commission in May, City Council Members Steven Matteo, Joe Borelli, and Justin Brannan -- who represent parts of southern Brooklyn and Staten Island -- urged, “First, do no harm to Class 1 and 2 homeowners.”
Responding to a co-op owner who worries about rising taxes year after year, Mayor de Blasio said, “I want to be...really honest with everyone that we cannot end up with a system that reduces our revenue substantially, unless people want to see a change in the services provided by city.”
>>Renters
For residents, the weight of New York’s property classification system is harder to bear the further you are away from the mitigating effects of ownership, which can put serious pressure on renters who can’t cash in or pass on tax burdens to tenants. In a class-action lawsuit filed in 2014 on behalf of African-American and Hispanic renters, the real estate law firm Newman Ferrara claimed that the way the state classifies different types of property has resulted in a disproportionate tax burden being passed on to renters in large residential buildings.
According to a CBC analysis, as of December 2016 one- to three-family homes made up roughly 48 percent of the total market value of New York City property, but were taxed only about 15 percent of the total levy. By contrast, Class 2 properties -- apartment buildings, co-ops, and condos -- made up approximately 25 percent of the market, but were taxed significantly more: nearly 38 percent of the total.
Most of that burden falls on apartment buildings because owners of co-ops and condos often pay such a small percentage of their property value in taxes. To maintain their profit margin, landlords often redistribute the tax burden to tenants (the same is true for commercial tenants, which can put a strain on small business). The 2014 suit alleged, since large apartment buildings are predominantly occupied by African-American and Hispanic tenants, the uneven tax burden they experience is a violation of the Fair Housing Act.
The property tax burden on one- to three-family home owners can be mitigated by the lower share they pay on the property’s value; the tax burden on co-ops and condos is not great because they are assessed on a fraction of their sales price; and much of the tax burden of big landlords can be passed on to tenants. But renters, who make up two-thirds of all occupied units, according to 2017 U.S. Census data, have no outlet to spread their burden.
(Homeowners who pay a significant portion of their income in property taxes and cannot immediately benefit from the rising value of their homes without selling them, are also put in a precarious situation as taxes rise annually and the costs of maintaining aging housing stack up. The city’s Third Party Transfer program, which seizes buildings from landlords who are behind on taxes and other fees, has recently come under fire for taking the homes of lower-income, minority property owners.)
The 2014 Newman Ferrara suit was dismissed by a state Supreme Court, which rejected the notion that property taxes could be shared more equitably among the classes as “speculative.”
Short of revamping the city’s entire property tax system, the push to improve conditions for many tenants was a major point of contention in Albany this year, as state rent regulations affecting the city and surrounding suburbs approached their expiration date in June. A concerted push under the new Democratic governing reality resulted in a landmark package of tenant reforms aimed at strengthening protections and closing loopholes in rent regulations like reforming the major capital improvement program, ending vacancy decontrol, and eliminating the vacancy bonus, among others. These regulations affect roughly 2 million tenants in 1 million apartments.
“We made a commitment that the new Senate Democratic Majority would help pass the strongest tenant protections in history,” said Senate Majority Leader Andrea Stewart-Cousins in a statement after the package passed both houses of the Legislature. “The legislation we passed today achieves that commitment and will help millions of New Yorkers throughout our state.”
>>Income
While statutory caps were put in place to keep homeowners’ property taxes from rising too quickly, they have still tended to outpace the growth in household incomes, creating a disparity in tax burden across income levels. A report by the city Comptroller’s Office from September found that between 2005 and 2016 annual property tax revenue grew an average of 6.4 percent a year, while the household incomes of small home, co-op and condo owners rose only 2 percent per year. As a result, the share of income that goes to pay property taxes on those types of homes has risen significantly and is most pronounced among the lowest earners.
The comptroller’s report shows that households making less than $50,000 -- largely retirees whose incomes had been higher when the homes were purchased -- had property tax payments increase from 6.6 percent of household income in 2005 to nearly 13 percent in 2016 (the study does not take into account social security earnings and other non-taxable income for seniors, meaning its findings for this group may be higher than seniors’ true property tax burdens).
“For households at this income level, where there is little or no discretionary income, these increases impose significant constraints and sacrifices on household budgets,” the report reads. By contrast, homeowners with income between $250,000 and $500,000 paid only 2.9 percent of their income in property taxes.
Some advocates have proposed what are known as “circuit breakers” to deal with property tax burdens on lower-income New Yorkers.
A circuit breaker essentially provides a tax rebate for lower-income property owners by reducing state income taxes if property taxes exceed a certain proportion of income, or simply by capping property taxes as a percentage of income. Hellerstein was a proponent of implementing circuit breakers, as was Governor Carey, who included them in his own 1981 proposal, which failed. In November, the CBC testified about the benefits of circuit breakers before the city’s Advisory Commission.
But mechanisms like circuit breakers, which create indirect relief through income tax reductions -- as well as various other kinds of exemptions, abatements, and rate limitations -- when piled on to triage the discrete consequences of New York’s property tax system (exacerbated by the city’s complex housing portfolio), also contribute to the opacity of the system -- one of the main problems the Commission aims to address.
“Homestead exemptions, or elderly or disabled or veterans exemptions...tax abatements and rate limitations and assessment limitations and assessment increase limitations -- it becomes a very complex system and ultimately non-transparent,” John Anderson of the Lincoln Institute for Land Policy noted before the Advisory Commission in February.
But exemptions and other forms of relief are popular among property owners in distress and are something that can be enacted by the city, making them attractive to local politicians trying to court voters. (Borelli introduced a bill to the City Council in 2018 that would give a tax exemption to veterans of Cold War conflicts.)
Disparities exist despite tax credits and other programs intended to ease the burden on lower-income New Yorkers, and they are likely to get worse.
The increase in tax burden identified in the Comptroller’s report was tempered by the rising value of property assets and declining interest rates over the past 20 years, which kept mortgage payments low, according to its authors. But the report notes interest and mortgage payments have begun to rise while property value growth has subsided in many neighborhoods, and phase-ins on co-ops and condos (like statutory caps on small homes) mean that property taxes can continue to rise even after the market stabilizes.
Changes in state and local tax deductions from Washington, D.C. last year mean taxpayers who itemize their deductions may no longer be able to deduct the amount of their property taxes from their federal taxes.
>>Geography
Last September, Citizens Budget Commission released an analysis showing that homeowners on Staten Island and in the Bronx have a higher effective tax rate than the rest of the city, meaning they pay a higher percentage of their property’s market value in taxes despite owning homes that are worth less.
This, the report notes, is the result of statutory caps set in state law on the rate by which assessed values can grow. There are different caps for different categories of property; for small homes the cap is set at 6 percent annually, or 20 percent over five years.
The growth rate cap, intended to insulate homeowners experiencing rapid market growth from dramatic property tax increases, has the effect of shifting the tax burden from booming neighborhoods to ones with more stable housing markets, regardless of the overall value of the homes. The CBC analysis finds only 5 percent of the city’s single-family homes are assessed at the 6 percent target ratio because the caps keep most assessments lower. But Staten Island and Bronx homeowners do not seem to be the beneficiaries of this dynamic.
Council Members Borelli and Matteo, who represent districts on Staten Island, in a 2016 press release said, “Staten Islander’s [sic] on average pay [property taxes on] 98.5% of their actual market values, while average Brooklyn and Manhattan class-1 homeowners pay 88.5% and 87.2% respectively.”
Politicians from Staten Island have been among the most vocal proponents of property tax reform. The borough has a large aging population on fixed income and roughly 70 percent of residents own their homes, according to Census data.
In 2016 Borelli and Matteo, both Republicans, called for a bipartisan commission to look at the economic burdens on one- and two-family homes, including the caps issue. They also called for the Department of Finance to use actual assessors, not statistical models, in order to account for a property’s actual condition (on Staten Island only a tenth of homes were built in the last 20 years). Assembly Member Nicole Malliotakis, also a Republican, joined Borelli in calling for a property tax commission when she ran for mayor against de Blasio in 2017. (Property tax reform and relief was also a central pillar of Republican gubernatorial candidate and Dutchess County Executive Marc Molinaro’s 2018 campaign against Gov. Andrew Cuomo, who this year pushed through a permanent 2 percent cap on annual property tax growth, which applies everywhere outside New York City.)
To address the tax burden inequities, Borelli has called for the Legislature to at least change the law so that caps reset when a house changes hands. Borelli was the prime sponsor of a resolution, co-sponsored by 13 others in the 51-seat Council, calling for the change in January 2018, but it has not been adopted.
He repeated the proposal to the Advisory Commission in September, saying, “The cap is attached to the property, not the owner, and the result creates vast disparities between the city’s wealthy and middle-class homeowners, and among wealthy homeowners themselves depending on when their homes were built and the characteristics of the market.”
>>Race
Tax Equity Now New York, the coalition led by former city finance commissioner Martha Stark, has highlighted some of these inequities in its lawsuit filed against the city and state in 2017. The lawsuit, filed after long-running frustration with elected officials’ apparent unwillingness to act on property tax reform, alleges New York’s property tax system has a disproportionate negative impact on homeowners and renters in less affluent neighborhoods with large populations of people of color.
In a study conducted by the group, higher tax burdens, especially those identified in the Citizens Budget Commission analysis, were shown to have a disproportionate impact on neighborhoods where racial minorities make up a majority of the population.
At the crux of the issue is the claim that property tax assessments have not reflected true market values, resulting in neighborhoods predominantly of color being assessed 19 percent more than predominantly white ones, the group alleges. Tax Equity Now is seeking changes to the law, not compensation, but has not specified what those changes should be. The suit survived the city’s motion to dismiss in September but is now stayed, pending appeal.
This is part two of a three-part series. Read part three - The City's Bottom Line - here. (Find part one - Taking on the Difficult Task - here.)
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by Ethan Geringer-Sameth, reporter, Gotham Gazette
@GeringerSameth @GothamGazette