I support both the governor and mayor’s efforts to reduce costs for residents of New York City. However, I recently learned that every New Yorker who doesn’t own property is being forced to cover a share of real estate taxes for residents who do own property. This is an unintended consequence of policy intended to help ease property taxes, but it’s creating a wealth transfer, from poor to rich, and it’s happening on people’s electric bills. Now, we’re all paying more for power because of a tax system in much need of reform.
According to a new report, New York has created a process where if single-family homes in the city increase in value over 5%, the real estate taxes that would be collected over that 5% are shifted onto everyone’s electric bill.
Lawmakers in Albany and the city have known about this problem for decades now, but they have not been able to muster the political will to fix the issue. It’s not hard to understand why, either: It’s because fixing this problem would mean that the government would have to either cut the real estate taxes owed by property owners and lose out on that revenue or force those property owners to pay higher real estate taxes. Obviously, politically speaking, it’s easier to do neither, stick those property taxes onto every New Yorker’s electric bill, and hope no one notices.
However, people are noticing, because electric bills keep going up and recipients are demanding to know why it’s happening. Of course, some of the reason that power bills are going up is because energy costs are increasing thanks to the president’s war in Iran, and it costs the utilities more to build new infrastructure because of inflation. Those costs are borne by the customers.
However, in New York City, almost 30% of an electric bill is fees and property taxes that ConEd is collecting on behalf of the government. A good portion of everyone’s power bill is to cover the real estate taxes for homeowners in New York.
ConEd collects so many tax dollars on behalf of the government — over a quarter of the company’s operating expenses are just those property taxes. Keep in mind that the national average for utilities is about 7%, meaning that, on a proportional basis, our utility collects about four times as much in property taxes as most utilities across the nation. It’s no wonder that New Yorkers are frustrated that their electric bills are so high.
Undeniably, tax collections are going to be a hot topic in our community as New York City continues to face budget shortages. Mayor Zoran Mamdani is urging Governor Kathy Hochul to raise taxes on the wealthy to fill that budget gap. I understand that she has promised New Yorkers that she won’t increase income taxes, which is complicating matters.
But our new mayor was elected because residents of the city are demanding that our lawmakers make New York City more affordable. Just about everyone in New York pays an electric bill. So, if the mayor and the governor, working together, could address this situation and make property owners pay more of their fair share of real estate taxes, then it could help lower everyone’s electric bill. I would be more than happy to assist with helping to get the Mayor and the Governor together on this issue.
As the nation copes with the President’s actions that are making our lives more expensive – specifically his foolish tariffs and the even more foolish war in Iran – I urge our leaders in City Hall and Albany to consider lowering electric bills by collecting real estate taxes from the New Yorkers who owe them. That would be smart public policy and could set an example for Washington about what good government looks like.
Former Congressman Ed Towns represented Brooklyn in the U.S. House of Representatives from 1983-2013.