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$100M Tax Benefit Sale Plays to Mixed Reviews

NEW YORK CITY-The city's 2003 budget contains a one-line item that has been raising eyebrows all over town. It's a controversial plan to sell the tax benefits to city-owned property to private entities.

By Glen Thompson | Updated on February 15, 2002

NEW YORK CITY-City and industry officials are still trying to fathom the implications of a single line in Mayor Michael Bloomberg’s $41.4 billion 2003 budget. The amorphous item indicates that the city wants to sell tax benefits from its owned real estate to private entities, bringing in a one-shot cash infusion to city coffers that is estimated at $100 million.

The item, found in volume 2 of the budget’s financial plan, sounds innocuous enough on the surface: “The city will transfer tax benefits relating to a city-owned asset to a private party.” It’s the statement’s lack of specificity, however, that has caused rampant speculation about its potential ramifications.

“If the city can do this then one wonders why other state and local governments won’t turn around and do the same thing,” says James Parrott, chief economist at the Fiscal Policy Institute. “And that would have significant implications for federal tax collections.”

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