A Stitch in Haste

I blogged recently about some political shenanigans regarding New York City's water tax rates.

It now seems that the water tax river runs not only wide but also deep:

About 231,000 water customers in New York City are late paying their bills — some by just a few months, others by decades. In all, these water delinquents owe the city more than $625 million in overdue bills and penalties.
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And so officials have started working on a plan to selectively cut the water to a few residences with outstanding bills to show that they are serious about collecting those debts.
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Instead, officials plan to target only high-income neighborhoods, to make examples of a few privileged New Yorkers who have not paid their bills — all bills average roughly $600 a year per household — and who would be in no position to complain if they were caught stiffing the system.

Here's what I don't understand: Unlike electricity or cable television bills, tenants generally don't pay water taxes; property owners do. So why not just do what every other property-related creditor or tax authority does — attach a lien to the property? Not only would the delinquent taxes automatically be available whenever a property was sold, but the threat of negative credit implications would serve as a powerful incentive to keep current with one's water obligations, the same as with any other debts.

Well, here's (sort of) the answer:

[A] loophole allows owners to take their properties out of the lien sale at the last minute by paying their property taxes, even if the water bills remain unpaid.

I still don't get it. If the problem is with the law, then, um, why not change the law? Wouldn't that be easier, and politically smarter, than shutting off people's water?

I can't help but wonder whether the fact that there's an income bias in this proposal is part of the explanation. I have no problem with shaming wealthy deadbeats, but how many "poor" landlords are there? And the article says high-income neighborhoods, not high-income delinquents, are to be targeted. Might there be just a hint of class-based retribution and schadenfreude in this proposal?

It's one thing to oppose high taxes; it's another not to pay the taxes you owe (although certain hyper-anarcho-libertarians might disagree). Of course the city should work to collect these unpaid taxes. But it should do so in a intelligent, efficient, and comprehensive way, rather than inviting abuse via soak-the-rich theatrics.

FUN FACT: NYC's water supply played a role in the famous (and lethal) rivalry between Alexander Hamilton and Aaron Burr. Having seen the success of Hamilton's new Bank of New York, Burr sought a charter for his own bank but was blocked by his opponents in the New York State legislature. He already had, however, a charter to start a water utility, the "Manhattan Company." So he used (abused?) a clause in that charter that allowed him to enter any business necessary to facilitate the water operations (somewhat like the Necessary and Proper Clause of the Constitution). So he decided that — presto! — his water company "needed" its own bank.

The water company never actually opened, but the Bank of the Manhattan Company thrived. For those old enough to remember such things, that was the "Manhattan" in "Chase Manhattan Bank" (now part of JPMorganChase).

Architecture buffs, meanwhile, may be aware of the famous "height contest" between the Chrysler Building and the Bank of the Manhattan Building, which culminated in the former's now famous spire.