Mayor Michael R. Bloomberg presented a $45.7 billion budget plan for fiscal year 2005 and awarded property owners a $400 tax rebate to thank New Yorkers for their sacrifices in helping the city weather its fiscal crisis.
"New York City's homeowners stepped up when the city needed them most," Mayor Bloomberg said in his State of the City address at Silvercup Studios in Long Island City. "Now that our fiscal situation has stabilized, they deserve to be rewarded for their sacrifice. Over the last two years, we have made the tough decisions that have maintained vital city services, kept control of the city finances with its elected officials and maintained the city's long term fiscal stability," the mayor said. "While we are not out of the woods yet and the city faces considerable challenges in the future, New York's finances are balanced and our best days are yet to come."
Mayor Bloomberg noted that over the past two years, New York had weathered its toughest fiscal crisis in a generation. Budget gaps hit all time highs; pension, Medicaid and other non-discretionary spending grew at a tumultuous rate, requiring more than $3 billion in revenue to close the budget gap. It took strong, decisive and disciplined financial management to stabilize the city's finances and strengthen overall tax revenues, he said. Economic improvement is evident in that Wall Street profits are expected to top $15 billion, a substantial increase over last year, but those figures are still well below industry projections, according to Bloomberg. Tourists are returning to New York City, hotel occupancy and room rates have increased and the real estate market remains healthy. Residential property values, noted Bloomberg, have increased by as much as 15 percent. Fiscal restraint, however, is still a necessity. While the city's finances have improved, the city is still facing an approximate $2 billion deficit next year, the mayor said.
Class 1 and Class 2 New York City property owners - of which there are 600,000 owner occupants of one-, two-, three-family homes, and co-ops and condominiums - will be eligible to receive a $400 tax rebate to help offset the 18.5 percent property tax increase that Mayor Bloomberg signed into law in December 2002. According to a recent study by the Citizen's Budget Commission, New Yorkers pay the highest taxes in the nation ($141 for every $1,000 they earn) - second only to California, $121; and Connecticut, $120. The least taxed states, according to the study, are New Hampshire and Tennessee. This rebate program will cost the city $250 million, according to the mayor's office.
Stephen Spinola, the president of the Real Estate Board of New York (REBNY) heralded the mayor's action. "The Real Estate Board of New York applauds Mayor Michael Bloomberg's decision to return some $250 million to the taxpayers of New York. The mayor clearly understands that the most important thing he can do is strengthen New York's business climate - one of the most fundamental methods of achieving that goal is to reduce the cost of living and doing business in New York City. We will work to encourage the City Council and state Legislature to adopt the mayor's proposal, and enact the legislation needed to effectuate the $400 rebate," says Spinola. "We are hopeful that as the city's economy continues to improve, the mayor will continue the trend of reducing the tax burden, and will provide relief to the business sector, which pays an overwhelming majority of taxes collected by the city of New York."