The legislation, sponsored by Syracuse Common Councilor Kathleen Joy, would have allowed any property owner who is facing foreclosure due to back taxes, a long-term repayment plan called a tax trust. In April, Syracuse Mayor Stephanie Miner changed city policy to allow tax trusts for only owner-occupied residential properties.
Click HERE to download the PDF version of this article.
Two days after a public hearing on the subject, the mayor vetoed Joy’s proposed legislation on September 25. “The administration’s policy to limit tax trusts is already working, and changing it is a mistake,” Miner said in a news release.
According to the release, earlier this year the Miner administration discovered landlords were asking Councilors to hold votes foreclosing on their tax delinquent properties to give them time to flip the properties to obtain more favorable repayment terms. This is the reason Miner said the tax trusts were limited exclusively to homeowners.
Joy said the mayor’s policy is “discriminatory” and if any person or business meets the criteria they should be entitled to a tax trust. “It will be a dramatic decision against small businesses,” she said.
“Businesses like auto repair and auto body shops, they’re probably somewhat vulnerable to market demand, weather conditions, and if they get behind in their taxes through no fault of their own, they should have the ability to pay back their taxes,” said Joy. “We should have the ability to work with them to keep them open.”
By participating in a tax trust, property owners have to come up with the current year’s tax, a 10 percent down payment and then are charged 12 percent interest over the time they are delinquent up to five years. “It’s not a gift by any means,” said Joy. “It’s a last resort for property owners who want to keep their property.”
One of these is Sam Vigliotti, the owner of Sam’s Auto Body & Service Center. Vigliotti, who owns four shops in the Syracuse area, has operated his business for nearly 50 years. According to a recent article written by Tim Knauss, a reporter for The Post-Standard and syracuse.com, Vigliotti tried to resolve a $40,000 delinquent tax bill by entering into a tax trust for one of his shops.
In his article, Knauss wrote that city officials will not grant Vigliotti a tax trust due to the mayor’s new policy. “We were greatly affected by the economy, and I had a partnership break up. There are a lot of different circumstances for different people,” Vigliotti was quoted as saying in the article, adding that sometimes business owners need tax trusts to overcome setbacks.
Joy needs six out of nine votes on the common council, which is the legislative branch of city government, to override the mayor’s veto. She already has five. As the chairperson of finance, taxation & assessment, part of her job is to get tax revenues into city coffers to make infrastructure improvements. “Of course we want as many tax dollars as possible,” said Joy, who estimated that the City of Syracuse is $12 million in debt. “I calculate that this maneuver on the mayor’s part will short the city by $400,000.”
Knauss wrote in his article that approximately 75 percent of tax trusts go into default, according to city officials. In response, Joy said that even if this number is accurate, the business owners have already paid the current year’s taxes, 10 percent down and 12 percent on a monthly basis until they became delinquent. “I’d rather take that money and give them a chance, then writing them off from the outset,” she said.
Also, she said there’s quite an incentive for business owners to pay those taxes on time, to keep the tax trust current and not be in default.
“Sometimes people get into financial circumstances that are beyond their control,” said Joy. “Rather than wrestle away a commercial property from someone let’s work with them and get the money in. It’s a win-win situation from my perspective.”
Mayor Miner’s office declined to comment when asked by Autobody News how the recent veto will affect local businesses.
When Autobody News went to print, Joy did not have enough votes to override the mayor’s veto. She said that she hopes to revisit the idea of tax trusts with an alternative that both addresses the mayor's concerns about absentee landlords flipping their properties while allowing businesses and other owners to pay their back taxes.
Common Councilor Kathleen Joy can be reached by phone (315) 448-8466 or Email: firstname.lastname@example.org