Gregory Lobo Jost
Water-Boarding NYC Homeowners… Again!
A huge increase to one of the most regressive taxes in New York City will be upon us just in time for New Year's. Generally thought of as just a utility, water and sewer charges pay for much more than the delivery of H20 in and out of our homes, and they disproportionately fall on low, moderate and middle income families.
In the midst of New York’s fiscal crisis twenty-something years ago, then-Mayor Ed Koch shifted the City’s water-related capital expenses off of the capital budget and onto rate payers. In addition to covering the actual operation costs of the water system, water rates now go towards capital costs (paid through debt service on bonds) and a rental payment to the City of New York. These last two items are entirely of public benefit (the rental payment goes directly into the City’s general fund) and should be paid for through a progressive method of taxation.
Instead, those who use more water are paying a larger share of major capital costs, such as the controversial filtration plant being built on Bronx parkland that is billions of dollars over budget. The very same low, moderate and middle income NYC homeowners that often shell out half of their income on housing costs are unfairly subsidizing this system because they generally use more water than upper income households since they are less likely to be away from home on vacation, have larger families, and more often live in overcrowded conditions.
In an effort to improve the Department of Environmental Protection's dismal collections, the New York City Water Board met last week to approve their plan to send shut-off notices to more than 8,000 single family homeowners who are delinquent at least $1,000 and for more than one year. As rates have increased dramatically (9.4% in 2006 and 11.5% in 2007), so have the number of homeowners in New York City who are at least 180 days behind on their water bills – the number is now up to 95,000, or about 15% of all owners of 1 to 3 family houses. Yet DEP and the Water Board agree that more drastic increases are necessary. They’ll be meeting the morning before Thanksgiving to decide just how much to raise rates on January 1 – somewhere in the ballpark of 18% according to Water Board Executive Director Steven Lawitts.
Undoubtedly, more oversight on DEP’s cost overruns is necessary, especially as City agencies figure out how to cut their budgets by 2.5% for the current fiscal year and 5% next year (as Mayor Bloomberg has mandated). Only a fraction of DEP’s budget is paid for out of the City tax levy, and they will only need to trim the 2.5% from that portion of their budget. Meanwhile, DEP will more than make up for that loss by raising water rates yet again – an additional 18% spike on January 1 will mean a 44% combined increase since June 2006.
As for all of you renters, don’t think you’re off the hook just because you don’t pay for water directly. These costs will continue to trickle down in higher rent increases each year.
And to understand just how bizarre the whole water payment system is, consider that using less water won’t save you any money in the long run. The Water Board actually admits they have had to raise rates extensively over the past decade to make up for all of the conservation going on! If it was just a utility, that wouldn’t be the case.
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Posted at 10:21 PM, Nov 14, 2007 in Cities | Energy & Environment | Fiscal Responsibility | Government Accountability | Housing | Middle-class squeeze | New York | Tax Policy
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