CAPITOL — Gov. Andrew M. Cuomo on Tuesday announced a proposal to expand an on-going crackdown on abuse and fraud in the state’s STAR school tax relief program.
Cuomo’s proposal, included in his 2020 executive budget, would expand the use of the state-run STAR Income Verification Program that can detect income fraud, and would permit the commissioner of the Department of Taxation and Finance to seek repayment in cases where a STAR check is erroneously sent to someone who is already receiving the benefit.
The new proposals would build on past efforts that include a six-year ban on STAR benefits for anyone who knowingly provides false information on an application for the tax credit, which is available only to homeowners on their primary homes, and who fall within income guidelines that qualify middle-class homeowners.
The STAR program provides $3.4 billion in relief from school property taxes. It includes the Basic STAR benefit for homeowners with annual incomes under $500,000, and the Enhanced STAR benefit for seniors with income of $86,300 or less. The benefits can be worth hundreds of dollars each year.
Cuomo believes some people provide false income or property-occupancy information to get the potentially lucrative benefit.
“The STAR program provides a substantial benefit to property owners, and those who seek to profit at the expense of honest New Yorkers must be held accountable,” Cuomo said. “This aggressive policy to combat fraud once again sends a clear message that New York has zero tolerance for anyone who cheats the system.”
In 2013, Cuomo signed legislation barring property owners who made a material misstatement on a STAR exemption application from receiving the exemption for six years. In 2015, the State Department of Taxation and Finance was authorized to recoup STAR benefits from property owners who unlawfully received those state benefits in past years.
According to a report state Comptroller Thomas P. DiNapoli issued in February 2018, the residential STAR program is the largest exemption category in New York state. In 2016, he said STAR accounted for 2.4 million partial exemptions. Under the program, the state compensates school districts for revenue lost through the exemptions.
A separate comptroller’s audit in 2013 found that there were numerous errors or inaccuracies in the STAR program, leading to calls for reforms, including some of those already enacted.
Local town and city assessment officials, who actually administer the program, said they don’t think there’s a large fraud problem in the Capital Region, but they also don’t have the ability to investigate when people provide them with income or property information, even if they suspect fraud.
“Not that I could prove, no,” said Rotterdam Assessor Brad Canning, when asked if there’s fraud. “Are there people who are misstating their incomes, sure — but gross fraud, I wouldn’t think it’s an issue around here.”
Canning said his understanding is that the issue may be larger on Long Island, where the exemption may be being claimed on residential properties that are actually rental properties, and where property taxes are higher than they are upstate.
Saratoga County’s Real Property Tax Service doesn’t hear concerns about from local assessors.
“Not that I’ve noticed here in Saratoga,” said Joanne Bosley, Saratoga County’s director of real property tax services. “Now that the state is more involved in the STAR program, they are taking more of it over.”
The state in January began requiring that applicants for senior STAR exemptions participate in the Income Vertification Program, which lets the Department of Taxation and Finance confirm an applicant’s income through income tax records.
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