Bisnow's podcast, Make Yourself At Home, hears from members of the commercial real estate industry about how they are managing this new reality and gaining insight into their day-to-day approaches. You can subscribe on iTunes, Spotify and Amazon Music.
This week, New York passed its state budget, and much to the despair of the real estate and business community, it includes a tax increase. Specifically, the proposal would mean the highest earners in New York City would be paying between 13.5% and 14.8% in state and city taxes.
On a state level, new personal income tax brackets would be formulated, seeing those earning between $5M and $25M paying 10.3%, and those with an income of over $25M paying 10.9%, per the publication. Those making in excess of $1M will see their personal income tax rate go up to 9.65% from 8.25%.
On this episode, we hear from Seth Pinsky, who was previously president of the city’s Economic Development Corp. during the Bloomberg administration, then an executive vice president at RXR Realty. He is now the CEO of the 92nd Street Y, though he’s speaking here in his capacity as a former city official, not as the head of the cultural center.
“We have systemic issues that make it very hard for the have-nots [to] become haves,” he said on the podcast in regards to the state’s budget. “There are some very significant parts of the budget that seek to do exactly that … the areas of concern I have is that it feels to me as if we run our government — both at the state and city level — measuring success by how much money we’re spending, rather than by outcome.”
He said the approach to increasing taxes is concerning, because it targets a section of the community that is highly mobile, and even more so since the onset of the coronavirus pandemic. And while the real estate and business community did try and convince lawmakers before that it was a poor move before the budget, Pinsky says New York business leaders still employ messaging tactics that no longer work.
“The strategy for a long time was that was adopted by the business community in New York was to find a blocking ally … They didn’t really feel they had to make their case to the general public, and as a result of that I don’t think they did,” he said.
“There’s generally a lack of understanding on these issues, and it's very hard to change the tenor of the conversation in a few short weeks of a legislative session.”
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