CFO Hits Back at Post Story
The city's Office of the Chief Financial Officer is pushing back against today's big investigative story in the Post, which found that officials in the CFO's office have "knocked $2.6 billion off the taxable value of commercial properties."
City officials have settled with developers over the tax bills on more than 500 commercial properties this year, which is a huge increase over the number of settlements in past years. This increase has led to some discomfort among tax assessors, which has led to the FBI poking around.
But the CFO's office is suggesting that the Post glosses over some much-needed context: the $2.6 billion knocked off this year isn't very different from the $2.6 billion knocked off by the city's independent tax appeal board in 2010, the $2.8 billion knocked off in 2009, the $2.6 billion knocked off in 2008, and the $2.3 billion knocked off in 2007. (The outlier is 2011, when only $1 billion was reduced from initial tax assessments because of a falling real estate market.) In other words, the increased number of settlements hasn't changed the bottom line. This is how the Post handled this info:
Current tax office chief Stephen Cordi said the $2.6 billion reduction approved by the tax office is in line with overall reductions made by the appeals board in prior years.
“The results are the same,” he said.
Last year, however, the total reduction for commercial properties was $1 billion, just over a third of this year’s total. Cordi said last year’s total was an “outlier” caused by a “substantial drop in initial commercial assessments” f0r 2011.
City officials have long complained that the independent tax appeal board, known as the Board of Real Property Assessments and Appeals, was letting commercial property owners who could afford high-priced lawyers off the hook on their tax bills. That's why the board was recently reconfigured and renamed. The CFO's office says it's saving money by avoiding litigation and settling before cases make their way to the board, though it's been unable to provide a figure as to how much money it's saved by doing so. Nonetheless, the CFO's point—that whether tax appeals are settled or contested by the BRPPA, the end result is the same—kind of takes the bite out of the whole story.
The OFCO's letter to editor:
Photo by Darrow Montgomery