The NY Times reports that the New York City Council is threatening to take away the property taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. exemption for the World’s Most Famous Arena, Madison Square Garden (MSG). This comes at a time when the Garden’s biggest tenant is involved in scandal after scandal, not including the way the team is performing on the court, which could also be called a scandal.
While this move to take away a property tax exemptionA tax exemption excludes certain income, revenue, or even taxpayers from tax altogether. For example, nonprofits that fulfill certain requirements are granted tax-exempt status by the Internal Revenue Service (IRS), preventing them from having to pay income tax. for the Garden is a step in the right direction in terms of public finance, the timing makes you realize that special tax provisions are always dependent upon the mercy of government officials. Government officials can giveth and taketh away tax creditA tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly. s, often for reasons that are arbitrary and in many cases downright ridiculous. To some degree, this may be one of them. While one city council member says the Knicks’ performance on the court is not the main reason for this action, the Times quote suggests it could be playing some role:
“I’m not going to be so flippant as to say that the fact the Knicks have absolutely stunk up the basketball court is a reason to get rid of their tax exemption,” said Councilman Lewis A. Fidler, one of the proposal’s sponsors. “But I think certainly the manner in which they’ve conducted their business otherwise has certainly left people feeling less than warm and fuzzy for them.”
He added, “It has perhaps created an environment in which people are willing to pile on.”
I’m pretty confident that if the Knicks were 29-3 and in first place in the Atlantic Division (aka Celtics) instead of 8-24 and in the basement of the Atlantic Division, this issue would have likely not been brought up.
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