PEP, April 2012: Bringing in the bucks: The city listens to the union and collects $1/4 billion in extra revenue.

Public Employee Press

MAKING PROGRESS: Part 3 in a series
Bringing in the bucks
The city listens to the union and collects $1/4 billion in extra revenue

By GREGORY N. HEIRES

The city is now bringing in more than $¼ billion a year in additional revenue - without increasing taxes - by implementing good government proposals the union has pushed for.

This huge stream of new revenue is coming in because the city has hired more Auditors and Assessors, improved its assessment procedures, reclassified properties that were incorrectly considered tax exempt and started collecting taxes and fees more aggressively - changes the union has called for.

"We have devoted a lot of energy to discovering areas where the city is failing to collect revenue, and we have made a number of recommendations for improvements," said DC 37 Associate Director Henry Garrido, who heads the union's project on contracting out and revenue. "It's very encouraging to see that our campaign is helping boost revenue."

Over the past few years, the union has issued reports documenting how the city loses nearly $850 million a year because of its failure to collect revenue. It has argued its case in the media and before the City Council.

The union has also publicized its findings and recommendations at a forum on revenue at the union in June 2011 and at a U.S. Congressional briefing at the end of last year. DC 37 Executive Director Lillian Roberts discussed the union's suggestions in a lengthy letter to Mayor Michael R. Bloomberg back in 2010.

The losses in readily available revenue identified by the union included $27 million in billboard taxes, $49 million in cell phone tower taxes; $173 million on properties wrongly categorized as tax exempt; $75 million in failed revenue collection from industrial and commercial properties; $200 million in business tax giveaways to hedge funds and $324 million in potential contracting cost decreases.

Agency acts on recommendations

In recent months, Finance Commissioner David M. Frankel and Deputy Commissioner Elizabeth D. Botwin have acknowledged the union's contributions and reported on a number of examples of revenue enhancements in meetings and correspondence with DC 37 and at City Council hearings.

While pleased with the progress, DC 37 has responded to the improvement in revenue collection in the best union tradition by saying, "More!" Specifically, the union believes that the city should keep hiring Assessors, Assistant Assessors and Tax Auditors, as well as listening to the suggestions of members who bring in the city's bread - and know best how to do it.

According to Finance Dept. figures, the extra revenue already coming in includes:

$7.2 million this year for billboards and cell phone towers.

$2.3 million by eliminating or reducing tax exemptions for nonprofit and charitable status. That extra revenue should come to about $15 million once the city completes its review of these property tax exemptions, which total $2 billion a year.

$350 million from new audits and improved audit procedures expected over the next three years by new staff.

$1.8 million through a pilot program that will track down correct addresses for the owners of properties with outstanding taxes.

$80 million a year from redesigning the auditing process.

Union seeks more hiring

In interviews with PEP, Assessors Local 1757 President Fran Schloss and Accountants, Actuaries and Statisticians Local 1407 President Maf Misbah Uddin, who is also treasurer of DC 37, spoke favorably about the hiring of new revenue-generating employees at the Dept. of Finance and the Office of the Comptroller.

But they stressed that the city could easily bring in tens of millions of dollars more by hiring additional workers. Years ago, the city employed hundreds more workers in revenue-generating jobs represented by the two locals.

Local 1757 had a tense relationship with Frankel's predecessor, Martha Stark, because of policy differences and her anti-unionism. One of the policy differences concerned her imposition of an unorthodox assessment methodology. Frankel has returned the department to the traditional methodology.

Schloss said the improvements in assessment procedures, along with other technical advances and an increase in field work supported by the union, are helping the department bring in as much as $100 million more in property tax revenues.

With typical salaries of $45,000, the 61 Tax Auditors hired during the past two years at Finance each brought in an average of $900,000, according to Frankel. That amounts to a total of $55 million in new revenue at a cost of under $3 million.