'Tapping' taxes from diplomats

New York City's success in collecting back water charges from foreign diplomatic missions and consulates has whetted its appetite for still another wave of demands from them. This time the goal is payment of real estate taxes.

Many of the city's 152 missions and 90 consulates, as well as some universities, are finally being tapped for old water charges -- some dating to 1967 -- because of Mayor Edward Koch's bite-the-bullet fiscal conservatism. Some $3.3 million has been collected to date.

Indications now are that while 28 of the missions and consulates have not yet paid their water bills, only a few of these feel the city is giving diplomatic privilege a bath and have not agreed to pay up.

Now, for the first time in many years, the city is pressing for the potentially far more lucrative back real estate taxes. According to Alan Parter , deputy commissioner of the New York City commission for the United Nations: " 24 missions and consulates are in arrears. Hundreds of thousands of dollars are owed."

Some consulates and missions are promising to fight the payment of real estate taxes in the courts on the grounds that international law, based on reciprocal arrangements between countries, exempts them from real estate taxes. City law, however, states plainly that only the office space and residences of the highest diplomatic officer (and his or her family) of a consulate or mission are exempt from real estate taxes. This leaves residential property of lower-level employees open to taxation.

"We're only asking for what's owed us," says Joel O'Brien, a spokesman for Mayor Koch. "But some diplomats feel, 'We're diplomats; we're exempt.'"

Mayor Koch has warned that missions and consulates refusing to pay city water bills will have their water turned off.

"Let them drink Perrier," another city official said, referring to the popular brand of bottled water.

The city also will begin to put liens on buildings for which real estate taxes have been withheld, Mr. Parter says.

According to city law, no consolate or mission was ever exempt from paying water charges, even though many thought they were. Hospitals and certain charitable institutions are exempt, it is pointed out, but colleges and universities must apply annually to the city Board of Estimate for a cancellation of charges. However, since July 1, 1978, both Mayor Koch and City Council president Carol Bellamy have opposed cancellations for colleges and other institutions of higher learning. And they have enough votes on the Board of Estimate to kill all cancellation bids.

Initially, many schools and foreign offices protested the water charges. One of these was Columbia University. But the school recently came through with a down payment of $123,558.83 for water owed since July 1, 1978, and "We're not protesting that any further," spokesman Fred Knubel says. Before 1978, Columbia had succeeded in getting its bills canceled by the Board of Estimate.

Colombia -- the South American country -- owed $20,000 for water its mission and consulate used since 1967. That bill has been paid.

But Mexico and several other nations apparently still are protesting the water charges. Said one Mexican consular official, "We will have to check first if we are providing the US with free water in Mexico."

Paul Fraser, a spokesman for the Canadian Consulate here, said of the water charges and real estate taxes: "We're not behind in anything. We don't ask for exemptions."