Repeals the tax exempt status of private universities that received real property tax exemptions of one hundred million dollars or more during the prior fiscal year.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8479
SPONSOR: Mamdani TITLE OF BILL:
An act to amend the real property tax law, in relation to repealing the
tax exempt status of educational institutions costing one hundred
million dollars or more a year in real property tax exemptions
PURPOSE:
To allow New York State to tax higher education institutions whose real
property tax exemptions cost one hundred million dollars or more per
year.
SUMMARY OF PROVISIONS:
Section 1 amends subdivision 1 of section 420-a of the real property tax
law by adding a new paragraph (c) to:
*Repeal the real property tax exemption for private institutions used
exclusively for educational purposes, whose real property tax exemptions
cost one hundred million dollars or more a year.
*Direct funds from the property taxes imposed on these private education
institutions to the City University of New York.
Section 2 sets forth the effective date.
JUSTIFICATION:
Private universities benefit from charitable status under New York State
law and thus do not pay real property taxes like other private landhold-
ers. This exemption costs New York City $659 million in revenue each
year. Two universities receive the biggest write-offs: Columbia and
NYU. Together, they account fcir almost half of the total cost of real
property tax exemptions given to private universities in NYC, totaling
$321 million.
Columbia and NYU have morphed into big land-owners in New York City;
Columbia and NYU respectively own 274 and 148 properties each in the
city. In fact, Columbia is the largest private landowner in NYC (1).
Through this landholding, these institutions grow their profits and far
exceed their roles as educational institutions. The ability to acquire
property at this scale is a direct result of their tax-exempt status:
because of their designation as charities, these institutions are able
to extract more value out of property than others, giving them an advan-
tage in the real estate market. Moreover, by evading property taxes.
Columbia and NYU shrink the collective revenue pot that funds municipal
services-services they also rely on, including Sanitation and the Fire
Department.
While Columbia & NYU grow their property rolls-with the value of their
properties more than tripling since the 1990s-and deplete public
coffers, CUNY students have suffered from decades of austerity budgets.
CUNY educates New Yorkers from racially and economically diverse back-
grounds, and "propels almost six times as many low-income students into
the middle class and beyond as all the Ivy League colleges combined,"
(2) yet CUNY schools are crumbling and perpetually underfunded.
This legislation would end this exemption for private universities whose
real property taxes annually exceed $100 million, and direct the result-
ing revenue to CUNY. All students in NYC must receive quality education;
it's long-overdue the legislature return funding to CUNY.
(1) https://www.nytimes com/2023/09/26/nyregion/col umbia-university-
property-tax-nyc.html
(2) https://vvwwl.cuny.edu/mu/forum/2023/09/18/ cuny-draws-top-marks-
from-u-s -news/ :-:text=CUNY's%20mix%20of%20qual
ity%20and,the%20Ivy%20League%20colleges%20 combined
LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
Revenue in excess of $320 million to be generated and allocated to CUNY.
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
8479
2023-2024 Regular Sessions
IN ASSEMBLY
December 29, 2023
___________
Introduced by M. of A. MAMDANI, GALLAGHER, MITAYNES, SHRESTHA, FORREST,
TAYLOR, LEE, KIM, EPSTEIN, BICHOTTE HERMELYN -- read once and referred
to the Committee on Real Property Taxation
AN ACT to amend the real property tax law, in relation to repealing the
tax exempt status of educational institutions costing one hundred
million dollars or more a year in real property tax exemptions
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 1 of section 420-a of the real property tax law
2 is amended by adding a new paragraph (c) to read as follows:
3 (c) (i) Real property owned by a corporation or association organized
4 or conducted exclusively for educational purposes, and which has been
5 used exclusively for educational purposes, shall not be exempt from
6 taxation pursuant to paragraph (a) of this subdivision if the amount of
7 real property taxes exempted for such property during the prior fiscal
8 year costs one hundred million dollars or more.
9 (ii) Moneys from property taxes imposed on private higher education
10 facilities pursuant to subparagraph (i) of this paragraph shall be used
11 for the city university of New York, as established by article one
12 hundred twenty-five of the education law.
13 § 2. This act shall take effect on the same date as a concurrent
14 resolution amending the constitution, entitled "CONCURRENT RESOLUTION OF
15 THE SENATE AND ASSEMBLY proposing an amendment to section 1 of article
16 16 of the constitution, in relation to real property tax exemptions for
17 educational institutions", takes effect.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13497-04-3
