April 12, 2004

HOW MAYORAL POLITICS IMPACT THE TAX GAME

By James Eugene*

It was a brilliant maneuver by Mayor Billionaire. A $400 rebate for every homeowner, coop owner and condo owner. Renters and commercial office space owners were excluded.

Why was it brilliant? When a politician puts $400 into your pocket, don't you smile? The commercial property owners don't win, but hey, they have a limited number of votes anyway. The renters can't get it because many building owners are governed by rent stabilization and cannot raise the rents anyway because of it. And if given money back, we all know that the tenants would not have seen decreased rents.

No Mayor Billionaire, a Republican in a Democratic city, needed something more than a budget fix. He needed votes. And what better way to get them to vote for him than giving a group that is most likely to support you $400. Brilliant.

And Speaker Miller seeing this realized he could not top it. So he did the next best thing. He put forward a losing proposition that would win him friends and campaign contributions.

Let's face it. A 2% decrease in taxes across the Board is not going to get Joe from Queens excited. But a 2% decrease on a major Manhattan office building is real money. And in keeping within the confines of the Mayor's total budget for the rebate, Gifford Miller spread the cheer, but the cheer spread best upon the wealthiest. It was almost like a George Bush tax cut. It looks like it helps everyone, but it really helps the rich most.

And Speaker Miller needs the rich. More specifically, he needs the City's real estate community's campaign contributions. And while the politicians who are Miller's competitors cannot do much for the City's real estate community, Miller's 2% decrease can. So of all the politicians running for Mayor, Miller establishes himself as the one who has the most friendly tax policy to commercial property and large scale residential property owners. Thus, Miller's 2% decrease trumps his rivals with respect to the large landowners and makes him the most viable candidate to receive their contributions.

Now there are those of you who may think I am just being way too cynical and that these machinations did not enter into the formulation of these respective political policies.

But aren't the positions oh so convenient?!

As the Lotto ad says, you never know.

* James Eugene is the pseudonym of a veteran of NYC government affairs. Inside The Big Apple will appear exclusively on the Empire Page. If you want to send tips or column ideas to James Eugene, email them to jameseugene@empirepage.com.