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Even in these desperate economic times. New Yorkers are literally treading on an abundance of riches. The gold beneath their feel is neither metaphor nor myth; it could, in fact, be the source of revenue that rescues the city from its fiscal dilemma.

The city has been a beacon that has attracted generations of high achievers from all over the world. Waves of immigrants, dreaming of wealth untold, sought to start new lives here. This rich mixture has created a climate enhanced by each new arrival, who not only offers gifts of talent to stock the marketplace of ideas, but also a potency that enriches the locale itself. This was the place where the most amazing volume and quality of wealth and services were exchanged. It became the place to be - or to emulate. Consequently, the value of the land in the City of New York is higher than in any other center in our country.

Although the population of New York has declined from a high of eight million over the past decade or two and much that was good has gone with the hundreds of thousands who have left, there still remain the synergies that make it a vibrant, vital meeting ground. This island is still worth tens of billions today. According to the ratio of assessed value to market value for 1992, published as estimates based on the assessment rolls, the value of land in New York is approximately $132 billion.

Here is a more dependable, equitable, and predictable source of revenue than any other. It should be the first to be tapped for the services and amenities required by the people of the city.

The value of land is not produced by any individual; therefore, taxing it more heavily does not deprive anyone of what is rightfully theirs. The appreciated value is created by the entire community and should rightfully be collected and expended for services and amenities which benefit the whole community.

The value of land is easily estimable. It cannot be hidden or disguised. Land parcels are contiguous, value is comparable, and the land cannot leave town to escape taxation. Giving greater weight to the value of land in taxation encourages allocation to its highest and best use. Taxation does not reduce the supply of land. Furthermore, people who use land productively have higher building values than land values and would therefore pay less with a land value tax.

Taxation does not increase the price of land because a higher tax makes it more costly to hold land unused or underused. Anticipated future increase in value is reduced, so more land is put on the market sooner, bringing its oprice down. Nor does taxation raise the price of goods produced on the land.

Conversely, taxing buildings, sales, wages, interest, or any other human activity takes from individuals what properly belongs to them, his difficult to determine how much value is to be derived from such taxation, for individuals and businesses are tempted to leave town, hide their assets.

If the Dinkins administration is to have any hope of erasing the current budget deficit and avoiding deeper shortfalls in the coming years, meaningful steps must betaken to obtain the needed revenue from a neutral source, and to blunt the expectation of windfall profits in another feverish land market like the one experienced in the 1980's. Creative changes in the property tax mechanism can structure it to produce revenue, equity and incentive.

The major problem is the failure to fully utilize the dual nature of the property tax. Economically, the property tax is really two different taxes that produce two different results. One part is the tax on buildings: the higher it is, the more it costs to build and maintain them. The other part is the tax on land values: unlike buildings, the amount of land in the city does not decline.

The attempt to structure the New York City properly tax to give special treatment to some property owners has produced a bizarre system loaded with monstrous inequities. Properties are divided into four classes: I) one-to-three-family residential; 2) four-to-ten-family residential; 3) utilities; 4) everything not in the other classes. Class 1 residential properties are reportedly assessed at 8% or market value and taxed, for the 1992 fiscal year, at 11.83%. Class2 residential bears an assessment ratio of 45% and a tax rate of 10.33%. Class 3, utilities, is even more complicated. Here, buildings are to be assessed at 50% of market value and taxed at 13.42%, while land in that class is included in class 4, which is comprised of all properties not in the other three classes: assessed at 45% and taxed at 11.3%.

The need for its reform is acknowledged by everyone. The change that would make it equitable, predictable and efficient would be to consolidate the four classes into one, assessing all parcels at full market value, and adopting two tax rates: a high rate on land and a low rate on buildings. Much more revenue than the projected $8.8 billion for fiscal 1992 could be obtained at lower costs to appropriately used land while making land speculation unprofitable (with higher land taxes, sitting on unused land would be very expensive).

But even without that desperately needed reform, the Mayor could raise the budget-balancing $3.5 billion with a 10% land levy across the board. While 10% seems high, it is really only 2.7% of what is given as the market value of the land due to the city's assessment system. And that would not be a high price to pay to avoid cuts in education, health care, infrastructure repair and the rest - it would just leave a little less for the speculators.