Revenue from taxes on property sales in New York City has plummeted, to $982 million in 2010 from $3.3 billion in 2007, making budgeting extremely difficult, Bloomberg reported.
The city’s Independent Budget Office, a non-partisan entity, said the decline in sales volume has translated to a deficit for dependent agencies, such as the Metropolitan Transportation Authority. The MTA, a state agency, has raised its fares on subways, buses and commuter rail operations in recent years.
“The sale of commercial property, which includes rental apartment buildings with four or more units under the city’s property transfer tax rules, has been a key to the boom and bust in transfer-tax revenues,” Bloomberg noted, sourcing a report from IBO.
And there is little hope in sight for the city or the MTA, both of which have cut services and personnel due to the revenue dip. “Even if the economy enters into a vigorous recovery, it is unlikely that the market will support the levels of prices that were observed during the peak,” the report said. [Bloomberg]