This is a rush transcript from "Special Report," February 11, 2013. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: All right, well, first the Sandy hit, and now the tax man hit. The New York City officials hiking the property values for some homes that were actually hit by Sandy, some by tens of thousands of dollars. That will mean a lot higher taxes right now. Homeowners getting hit with the higher bills calling it unconscionable, even heartless.
New York City Councilman Dan Halloran has some other choice words. He joins us now. How did his happen?
COUNCILMAN DAN HALLORAN, R - NYC: Neil, this is the convoluted and arcane system of New York City's real property tax code.
They allow a cap of 6 percent per year of increases, but they bank the rest of it. So even in years when there are decreases, unless you have caught up to what they consider market value, they're still allowed to tack it on and that's what they did, despite the fact that almost every elected official has said this is not the year to do these assessment increases.
In fact, Minority Leader Jimmy Oddo has put in a bill and is trying to get the speaker's office to move it forward which would prevent just this sort of tax hike on properties.
CAVUTO: These are done every year, Councilman, right?
HALLORAN: Absolutely, every year, without fail.
CAVUTO: So people would have come to the conclusion earlier, last fall there was a bad hurricane and maybe this would not be the year to do that.
HALLORAN: Maybe October-ish of this year, they would have figured out that going into November...
CAVUTO: But they knew the end result would be that a lot of Staten Islanders and others would be looking at higher property bills, some of them on property they don't even have anymore.
HALLORAN: Not just Staten Island. South Queens, the Rockaways, Breezy Point, and some of those homes, substantial devaluations occurred, complete wipeouts; 120 homes in Breezy Point alone were wiped out.
CAVUTO: Didn't they think that through before they sent the mailings out?
HALLORAN: The Department of Finance doesn't think a lot of things through. They're on a revenue kick and again the city has to spend $72 billion this year on its next budget and it has to find a way to have that money. This is one of the ways the city is able increase its spending each year.
CAVUTO: Who polices just that? When those mailings go out, Councilman, does anyone just say, you know, the optics on this don't look good?
HALLORAN: Well, I would hoped the mayor's office would have taken a look at that.
We will have hearings now with the Department of Finance over the budget for this next fiscal year. As you know, the mayor just proposed it. But I will give one that's going to make you even more sick to your stomach. Look at the return address for the tax bills. It's in New Jersey.
The city of New York outsources the collection of tax revenues to a place in New Jersey, and the water bills to a place in Pennsylvania. So we can't even afford to do business of collecting taxes inside New York.
CAVUTO: But, legally, are residents in these locales still required to pay these higher taxes?
HALLORAN: They are, unless they aggrieve the process, but guess what? That expiration date its February 15. You have to have your grievance in by February 15 or it won't be considered.
CAVUTO: So you are unable to pay the taxes, you have yet another problem with the tax man on top of everything else.
HALLORAN: And we have pushed forward lien sales. So if there's a sufficient amount of money in liens on your property taxes or for water and sewer bills, the city can come after you.
CAVUTO: So why doesn't Mayor Bloomberg just come out and say this is stupid, we made a mistake, I can't believe these (INAUDIBLE) not that he would use a term like that.
CAVUTO: But just say this is dumb, you know?
HALLORAN: Well, look, the mayor has done a lot of things for Hurricane Sandy victims and advocating in Washington.
It's time for him to turn his focus on his own administration and say to them, hey, have you paid attention to what I did about D.C.? Maybe we should be doing the same thing right here in our own backyard?
CAVUTO: All right. Councilman, thank you very, very much.
We did get this from a New York City Finance Department spokesman, Owen Stone, who told us that "the valuation of properties impacted by Hurricane Sandy is ongoing and the final assessment will be published in late May."
But this doesn't take away the argument that these assessments are higher and will mean higher taxes. But we appreciate the statement, nevertheless.
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