Public Employee Press

White Papers get results
Too slowly, city chases tax deadbeats

By GREGORY N. HEIRES

While applauding the city for pursuing tax delinquents, the union has charged that the Dept. of Finance’s new tax amnesty program is too limited. In October, Commissioner Martha Stark said the city had notified 500,000 business firms and commercial real estate owners in hopes of collecting $20 million in outstanding taxes. The amnesty on corporation, business, commercial rent and other taxes through Dec. 31, 2001 will last until Jan. 23, 2004.

“As the city confronts its budget problems, DOF is taking a step in the right direction by going after delinquent taxpayers,” DC 37 Executive Director Lillian Roberts said. “But the city has an estimated $2 billion in outstanding taxes. This program is a drop in the bucket. The city needs to be much more aggressive.”

DC 37 proposed the tax amnesty in “White Paper IV: Our City, Our Money,” which explored cost-savings and revenue-generating proposals for DOF. The White Papers are an on-going study of municipal waste and contracting out. Partly prompted by the series, the State Senate Labor Committee held a hearing in October on the impact of outsourcing on unions, cities and businesses.

White Paper IV charged that tax delinquency is just one of many problems with local business taxes:

• Corporate taxes provide only 5 percent of the state’s revenue, while personal income taxes make up 60 percent.
• Loopholes cost the city $1.6 billion a year. Some 35 percent of city contractors are from other states and have many employees who live outside the city and pay no city personal income taxes.
• Corporations based in the tax haven states of Delaware and Nevada do business with the city but avoid local taxes through tricky transactions with parent companies.

White Paper IV called for a tax amnesty program to recover $2 billion in outstanding taxes. It added that hiring 100 additional tax auditors could add $94 million to city revenues. By rescinding this year’s layoffs of 29 Property Tax Assessors and Assistant Assessors and hiring 50 more, the city could bring in another $56.3 million through more accurate assessments, said the union study.