Some homeowners saw bigger school tax bills than they expected this fall because of a change in state law.
The Legislature capped the amount of savings from the STAR exemption program to no more than a 2 percent increase. That means that if a resident’s exemption savings was $600 last year, this year’s exemption would be no greater than $612 — regardless of how much taxes increased, according to the state Office of Real Property Tax Services.
“The intent was to control the growth of the total cost of the STAR program,” said Geoff Gloak, spokesman for the Department of Taxation and Finance.
The state replaces the school budget revenue lost from the exemption. The total cost is $3.3 billion this year but it would have been about $125 million higher this year if not for the cap, according to Gloak. The state is looking to reduce the cost of the program by $212 million in the second year.
The other change to the STAR program was to limit the eligibility in the program to property owners whose income is less than a half-million dollars. “Before it was available to anybody who owned and lived in their own home,” Gloak said.
STAR, which stands for School Tax Relief, was enacted in 1997. Basic STAR exempts the first $30,000 of the value of a taxpayer’s primary residence for school taxation.
Enhanced STAR is for senior citizens who qualify with incomes of less than $79,050. It exempts the first $60,100 of the full value of the home, according to the state Office of Real Property Tax Services website.
However, those exemption amounts can fluctuate depending on how up-to-date the property assessments in the community are and whether they are in line with market values.
Gloak said the state sets a floor so the amount of an exemption cannot decrease by any more than 11 percent from year to year.
Taxpayers can find the rate for their municipality by visiting the website of the Office of Real Property Tax Services at www.orps.state.ny.us.
Shenendehowa Central School District Superintendent L. Oliver Robinson said school officials were unaware during the budget process that the state was capping the amount of STAR savings.
“It was one of those 11th-hour revelations that nobody spoke about during the budget session. Essentially, what happened was now taxpayers were compelled to — I hate to say it — eat the difference,” he said.
The difference in how much taxpayers saved through STAR was notable but not that significant, according to Robinson. He added that not many taxpayers do the exemption calculation.
Gloak agreed that he does not think people analyze the STAR exemption in great depth.
“What people tend to do is look at their bill and see how much they’re saving this year compared to last year,” he said. “I don’t think people too often get into how the amount is calculated, unless they feel like there was some loss they’re incurring.”
Frank Mauro, executive director of the Fiscal Policy Institute — a nonpartisan think tank — said he believes STAR is an ineffective way to provide tax relief.
The institute would prefer to see a “circuit breaker” approach, where if the property tax bill exceeds a certain percentage of a homeowner’s income, a credit would be given on the person’s income tax.
“We’ve always felt that STAR was not targeted enough in that it gives a little money to everybody, but it doesn’t give enough to the people who are truly overburdened,” he said.
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Categories: Schenectady County