N.Y. STAR school tax relief program baffles, confuses homeowners

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The more officials change the state’s property tax relief program the more confusing it becomes. And they always change it.

That was the message from local property tax assessors who testified Tuesday before the Assembly Property Taxation Committee on the two-decade-old STAR or School Tax Relief program designed to ease the pain of New York’s highest-in-the-nation school property taxes.

“People get checks and they don’t know what program they are in,”  committee Chairwoman Sandra Galef, D-Ossining, said of the numerous calls they get from homeowners regarding school taxes and STAR.

“Eighty percent of the people were not happy with the STAR changes. They were confused with the process,” agreed Scott Shedler, the Ramapo town assessor and president of the state Association of Assessors.

Taxation and Finance Executive Deputy Commissioner Andrew Morris said the agency has worked to keep up with the changes, most of which have been part of Gov. Andrew Cuomo’s budget proposals over the past few years.

“We’ve come a long way and continue to seek to make the process even better,” Morris said.

Created in 1997 during  Gov. George Pataki’s administration, STAR provides a reduction in assessed valuation used to calculate school taxes.  It exempts the first $30,000 on valuation, which can lead to savings of hundreds of dollars. The program is open for homeowners with incomes below $500,000.

For those 65 and over and who make less than $88,050, the first $68,700 is exempted. Savings for homeowners in this age group can easily surpass $1,000.

But changes in how those savings are realized continues to baffle homeowners.

For instance, people who purchased homes after Aug. 1, 2015 need to apply to the program through the state rather than local assessors. And rather than getting a lower tax bill off the top, they are given a STAR rebate check in the fall.

And this year, homeowners earning between $250,000 and $500,000 must also apply and get a check rather than a reduction.

Additionally, there’s a new inducement for those with incomes under $250,000 to apply for a rebate check rather than an exemption. Rebate checks can grow up to 2 percent annually. But the exemptions won’t. So far 2,000 people have switched, according to the Department.

The idea, said Queensbury Assessor Teri Ross, is that moving from an exemption to a check changes STAR on the state books from the expense to the revenue ledger. That’s because the checks are taken off one’s income taxes. That helps the Cuomo Administration say they’ve been keeping state expense growth below 2 percent annually, explained Ross.

“This administration is pushing the STAR check program because it’s a way to balance the budget,” she said.

Adding to the confusion are the separate tax cap rebate checks that have gone out. Homeowners whose districts have remained under the state tax cap get an additional check from the state, as a way to pressure schools to keep costs down.

Galef said homeowners can get mixed up, not knowing if their check is for a STAR rebate or tax cap.

These changes have led to mistakes by the state. The Syracuse Post-Standard late last year found that people who hadn’t paid their school taxes were getting their STAR rebate checks from the state anyway. That’s because there was no way to check who was delinquent.

Morris said they must by law mail the rebates prior to the school tax bills going out, usually in September. And they would need a statutory change to correct that. “We’re not in a position to withhold that advance payment based on the statute.”

School officials aren’t happy either.

That’s because people who get the rebate checks receive a higher school tax bill each fall, and may not remember or realize they are getting a STAR check to offset some of the increases (school taxes tend to rise continually due to contractually increasing salaries and benefit costs for teachers and other employees).

“They see an increase in their tax bill that isn’t actually an increase,” Tom Tatun, deputy director of government relations at the state Association of School Business Officials. That’s led some taxpayers to oppose local school budgets, which are voted on in May, thinking that their taxes are going up more than they actually are.

So what’s on the assessor’s main wish list for STAR? “What you can do is stop any changes in the STAR program,” Ross said.

Published by the Albany Times-Union

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