NYC Teachers Union Demands Tax Hikes While Exploiting Loopholes

The United Federation of Teachers (UFT) has come under scrutiny for securing over $17 million in tax abatements and credits on its two properties in New York City’s Financial District. These tax breaks include multiple Incentive Program breaks, tax credits and lease abatements from the city. 

The union has secured 129 separate tax breaks and refunds from the city over the last 14 years. The tax breaks starkly contrast with the UFT’s advocacy for higher property taxes for everyone else.

In 2002, the UFT sold its longtime headquarters and purchased an office building at 50 Broadway in New York City. It also “net leased” a 400,000-square-foot space at 52 Broadway, which left them responsible for the site’s property taxes. 

The UFT has filed at least 33 lawsuits against the city in the last two decades seeking various reductions in its property tax obligations. The union has claimed in various actions that city tax assessments were “unjust, erroneous, illegal, unlawful, excessive, and unequal.”

The years of tax breaks received by UFT contradict its leaders’ argument that property taxes on other owners inside the city should be higher so that teachers can be paid more. UFT president Michael Mulgrew said in March 2020 that the state budget had been “kept on a starvation diet” as a result of a 2% spending cap. 

He called on city council members to end the 2012 2% cap on annual property tax increases. The union also took a public stance in 2014 demanding the city raise “absurdly low real estate taxes” on property owners living outside of New York to secure more education funding.

American Federation of Teachers president Randi Weingarten formerly served as the leader of the UFT in New York. While she led the city union, she filed at least two tax cases contesting property taxes she owed on a $1.55 million East Hampton home she co-owns with her sister. Both of those lawsuits were settled without a trial.

The UFT manages its two Manhattan properties through nonprofit holding companies. Mulgrew is listed as the principal officer of both nonprofits on their most recent federal tax filings. As federally-recognized 501(c)(2) charitable organizations, both buildings are exempt from paying federal income taxes. 

While the union happily accepts massive tax breaks from the city, the city pays the union to lease office space in the buildings. The UFT has reaped over $6.2 million in rent and other payments from NYC over the last decade. The NYC Department of Education was UFT’s largest city tenant.

A UFT spokesman said, “The city tax code provides provisions for tax relief which apply to owners of real property. The UFT has participated in these programs to preserve union resources.”

Critics argue that the UFT’s tax breaks are a ridiculous double standard.

Rep. Nicole Malliotakis (R-NY) said: “Ask any teacher, firefighter, or police officer on Staten Island whether they can afford a property tax hike. It’s unconscionable that some people think hard-working taxpayers are ATMs with unlimited funds when the truth is if properties like the ones owned by UFT paid their fair share, the burden wouldn’t be falling on the middle class.”