Mayor Michael Bloomberg moved Wednesday, November 5 to cancel $400 property tax rebates awarded to homeowners annually.
The rebates were first issued in 2004 to offset an 18.5 percent property tax hike. Now the city must compensate for an estimated $3 billion budget shortfall next year. Bloomberg expects the cancelled rebates to save $256 million.
The Mayor also asked the City Council to raise property taxes by 7 percent beginning January 1, reversing a 2007 cut. Bloomberg also plans to eliminate 3,000 city jobs.
“Because our economy is stalling and our tax revenues are falling, we’ve had to make some tough choices,” Bloomberg stated in a press release.
City Council members, including James Vacca of District 13, criticized Bloomberg’s decision to revoke the $400 rebates.
“These checks were scheduled to arrive in October, and hundreds of thousands of homeowners are counting on them to pay their bills,” Vacca wrote in a letter to the mayor.
According to Vacca, some New Yorkers who called 311 about their checks were told that there was technical glitch and that the checks would arrive soon.
Council Speaker Christine Quinn echoed Vacca in a November 5 press release of her own, following up on Bloomberg’s budget.
“We have concerns about some of the proposals we heard about today,” Quinn’s release said. “Specifically, we are troubled by the proposed withdrawal of the $400 homeowner tax rebate that has been scheduled for later this year. Many families may be counting on that money in their annual budget, and to withdraw it could cause a big hole in their pockets.”
Wall Street’s September collapse and the ongoing financial crisis left Bloomberg with no choice, he said.
“The economy began slowing down well over a year ago, and city agencies responded by squeezing hundreds of millions of dollars out of their budgets,” read the mayor’s statement. “Nevertheless, when the sub-prime mortgage meltdown mushroomed into a global financial crisis, it caused a deficit between city revenues and our planned expenses…The only responsible thing to do was to start closing that gap now – because if we waited, the job of balancing our budget would only get harder.”
Bloomberg admitted that his plan might anger New Yorkers.
The 2009 shortfall, Vacca wrote, “is not so dire that we must go back on our word to taxpayers.”