Increase of .875 percent would raise $80 million by end of Fiscal Year 2010

City Hall, December 9, 2008 – At today’s Stated Council meeting, the New York City Council will introduce legislation that would raise the New York City hotel tax by .875 percent, an increase that could raise an estimated $80 million by the end of Fiscal Year 2010.

The Council will also vote on legislation that would create greater opportunities for Minority or Women-owned businesses to compete for jobs in construction projects that receive benefits from the Industrial and Commercial Abatement Program (ICAP). Finally, the Council will vote on a resolution urging the New York State Legislature to consider legislative proposals intended to provide better workplace protections for domestic workers.

INCREASING THE HOTEL TAX

The Council will introduce legislation, sponsored by Council Member Lewis Fidler, which would increase the rate of the occupancy tax currently levied on hotel rooms in New York City. Since December of 1994, the City rate has been set at 5 percent of the rent or charge per day for a hotel room; the new legislation would increase that rate to 5.875 percent.

For the average hotel room rate of $300, this would equate to an increase of only $2.62 a night. However, that small increase could provide the City with a substantial revenue stream during challenging fiscal times. By June of 2010, raising the hotel tax by .875 percent could raise an estimated $80 million – money that could be used to prevent cuts to critical City services like sanitation or public safety.

“In this difficult economic climate, everyone will need to pitch in to help keep New York City running – including the many visitors who take advantage of City services like police or transportation,” said Speaker Christine C. Quinn. “The City Council has identified a number of ways to tighten our belts, but we must also explore possible new revenues streams. This small increase in the hotel tax will be a big help in bridging the budget gap, and keeping even more of the burden off the taxpayers of New York City.”

“Asking foreign tourists to pay $2.62 a night on a $300 hotel bill is insignificant,” said Council Member Lewis Fidler. “Especially when you consider that we could use the $80 million generated to pay for 1000 new police officers and more.”

CREATING OPPORTUNITIES FOR MINORITY/WOMEN – OWNED BUSINESSES IN ICAP

The Council will also vote on legislation that would create greater opportunities for Minority or Women-owned businesses (M/WBEs) to compete for jobs in construction projects that receive benefits from the Industrial and Commercial Abatement Program (ICAP). ICAP is a program that provides abatements of real property taxes for eligible industrial and commercial buildings that are built, rehabilitated or expanded.

As a result of this legislation, sponsored by Council Member Thomas White:

All applicants for ICAP benefits, regardless of the size of the project, will receive information on how to access the M/WBE directory and what their obligations are under the program.
In order for projects of $1.5 million and above to obtain the ICAP benefit, the applicant must:
Inform the Department of Small Business Services (SBS) of any contracting and subcontracting opportunities at the construction site (SBS will post the opportunities on its website)
Review the M/WBE directory to identify firms that are qualified to perform the available work
Solicit bids from at least three M/WBEs on each subcontracting opportunity available at the project
Maintain records demonstrating the applicant’s compliance with the requirements, and certify that the applicant has complied with M/WBE requirements.
Finally, the legislation grants SBS the authority to audit the records maintained by each ICAP applicant to ensure compliance.
“By requiring ICAP applicants to conduct outreach and solicit bids from certified MWBE firms, as well as certify and draft detailed reports of their efforts, we as the City Council are making sure that owners and developers make good faith efforts to utilize Minority-and-Women-Owned Businesses in large construction projects that receive tax benefits,” said Economic Development Committee Chair Thomas White. “This is also an important step in addressing the inequity of contracting opportunities for MWBE firms within the construction industry, and on the economic front, this new requirement, if passed, will act as an economic shot in the arm for MWBE construction firms that are sure to be affected by the recession and financial crisis.”

Back in September the Council voted to amend ICAP, tightening eligibility requirements, shortening the length of the abatements period from 12 to 10 years, and excluding both utility companies and any construction in Manhattan between 59th Street 96th Street. The new ICAP is intended to generate significant industrial and commercial development at the lowest possible cost, saving City taxpayers hundreds of millions of dollars and supporting City businesses.

WORKPLACE PROTECTIONS FOR DOMESTIC WORKERS

Finally, the Council will vote on a resolution urging the New York State Legislature to consider legislative proposals intended to provide better workplace protections for domestic workers. The resolution, sponsored by Council Member Gale Brewer, also urges enforcement of all current laws and regulations that provide workplace protections to domestic workers.

Many domestic workers labor under harsh conditions, working long hours for low wages without benefits or job security, and may be subjected to verbal or physical abuse. Employers of domestic workers currently lack clear guidelines for employee benefits and terms of employment, which leads to variable and arbitrary conditions from workplace to workplace.

Additionally, domestic workers are among the most oppressed and vulnerable workers in the United States and in need of safeguards and protections from abuse. Domestic workers deserve basic rights, such as a living wage and fundamental workplace protections.

Council Member Gale Brewer called the Domestic Workers Bill of Rights “an important step towards improving the working conditions and securing basic rights for people who work hard throughout our City and State, yet often fail to obtain the respect and protections that they deserve. I am particularly proud of the Council for passing Resolution 1078 today because every victory in this campaign is an example of what can happen when women organize to support the most vulnerable among us.”