Council sets 2014 tax rate

As ex­pec­ted, City Coun­cil on June 13 set a tax rate, or mil­lage, of $1,340 per $100,000 of prop­erty value. Mem­bers also ap­proved a $30,000 homestead ex­emp­tion for own­ers who live in their homes.

With the tax rate and the homestead ex­emp­tion, prop­erty own­ers can look at the new prop­erty as­sess­ments they re­ceived this year and fig­ure out what their 2014 tax bills will be.

Coun­cil­man Bobby Hen­on (D-6th dist.) said he ex­pects the 100-per­cent mar­ket val­ues along with the homestead ex­emp­tion and the new tax rate will be­ne­fit most North­east res­id­ents. City Con­trol­ler Alan Butkovitz months ago had pro­jec­ted many in the North­east would see their taxes dip, re­main about the same or go up only slightly in 2014.

If an own­er who lives in his home ap­plied for and was gran­ted the homestead ex­emp­tion, he would sub­tract that $30,000 from his new as­sess­ment be­fore ap­ply­ing a tax rate. For ex­ample, the real es­tate tax on a house with the ex­emp­tion that is as­sessed at $180,000 would be figured out by sub­tract­ing $30,000 to get the $150,000 value that would be taxed. Since $150,000 is 1.5 times $100,000, mul­tiply $1,340 by 1.5 to get $2,010.

Not vot­ing for either the tax rate or the ex­emp­tion was Coun­cil­man Bri­an O’Neill (R-10th dist.), who said he favored a lower mil­lage. He ad­ded that the homestead ex­emp­tion not only pushed the rate high­er but also sliced so much off the tax­able value of about 30,000 prop­er­ties that their own­ers will pay no real es­tate taxes and get city ser­vices for free.

“I don’t think that’s right,” he said in a June 14 phone in­ter­view. 

O’Neill said the Ac­tu­al Value Ini­ti­at­ive as­sess­ment along with the new tax rate and homestead ex­emp­tion does mean a lot of North­east res­id­ents will be­ne­fit, but the be­ne­fit will be a very small one. 

“There would be more be­ne­fit,” the coun­cil­man said, “if the mil­lage were kept lower.”

He said he would have backed no homestead or the $15,000 ex­emp­tion May­or Mi­chael Nut­ter had pro­posed in March.

O’Neill said he also op­poses so-called “gentri­fic­a­tion” or “re­verse abate­ment” pro­vi­sions that would wipe out tax in­creases for 10 years for homeown­ers who will see their as­sess­ments triple.

To be eli­gible, own­ers would have to have lived in their homes for 10 years, and in some cases, just five years. In­come eli­gib­il­ity is too gen­er­ous, O’Neill said. It’s $83,000 for a single per­son and $112,000 for a fam­ily of four.

“You will not have to pay the tax in­crease for 10 years,” he said. “You ba­sic­ally have every­body else pay­ing your taxes for you and you nev­er have to pay it back.”

O’Neill said if all tax ex­emp­tions would evap­or­ate, the city’s real es­tate tax rate would be just un­der $1,200 per $100,000 of prop­erty value.

“We should have the low­est pos­sible rate to start off with,” he said.

But since the homestead ex­emp­tion is a done deal, he feels his con­stitu­ents should take ad­vant­age of it and if they haven’t ap­plied for it yet, they should. ••

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