In an effort to reduce the enormous burden of some of the highest property taxes in the country, Senator Flanagan announced that the Senate Majority Conference proposed the REBATE-NY plan, a comprehensive, 25 point plan to provide more than $2.4 billion in school and municipal property tax relief over the next three years, including direct rebate checks to property taxpayers, expanding the STAR program and the property tax circuit breaker, and encouraging consolidation of local government services. The Senate plan would save property taxpayers approximately $1.4 billion in the 2006-07 State fiscal year.
"This comprehensive plan will sharpen the focus on reducing property taxes, which are among the highest in the nation, and represent the largest tax burden for millions of New Yorkers," said Senator Flanagan. "Enacting this plan as part of the 2006-07 budget would be a major victory for taxpayers on Long Island and throughout the state."
To investigate the underlying causes of the rising property tax burden imposed upon homeowners, the New York State Senate commissioned a study conducted by the internationally-recognized consulting firm Global Insight which reveals Long Island’s total local government (including school district) and education spending exceeds both the statewide average and that for downstate suburban counties.
While school districts in Nassau and Suffolk counties receive $270 million (74%) and $515 million (60%), respectively, more each year than they did a decade ago, the average property tax bill for Nassau County households is 87% above the statewide mean and 24% higher than the downstate suburban region. In Suffolk County, the average property tax burden is 47% above the statewide amount, but 3% lower than the downstate suburban mean. Notably, money saved by Long Island homeowners through the state’s School Tax Relief ("STAR") program has helped lower these figures.
REBATE-NY School Tax Rebate Program
Under the tax rebate plan, Long Island homeowners would receive $532.8 million in direct rebate checks from New York State. This would be in addition to the homeowner’s STAR school tax exemption. To help homeowners pay their 2006 property tax bills, the state would begin issuing rebate checks in September 2006. In 2006, the rebate would equal 30% of the homeowner’s STAR savings for the 2005-06 school year, with the rebate rising to 50% in 2007 and 75% in 2008. Because of Long Island’s high school taxes, rebate checks to Nassau and Suffolk County residents would be among the state’s largest.
AVERAGE REBATE-NY DIRECT REBATE CHECKS ON LONG ISLAND
Basic STAR Enhanced STAR
2006-07 2008-09 2006-07 2008-09
Nassau County $300 $750 $528 $1,320
Suffolk County $291 $728 $444 $1,100
STAR Exemption Annual Adjustment
To help alleviate the impact of rising home prices, the STAR exemptions for LI homeowners have risen by roughly 33% during the last five years but, these increases have not fully offset rising assessments. As a result, the STAR exemption now covers a smaller portion of homeowners’ school taxes. For example, the Enhanced STAR exemption represented 42% of an eligible Long Island senior’s school tax bill in 2001, but only 30% this year. Similarly, the value of a Basic STAR exemption has fallen from 25% to 18%.
To maintain seniors’ eligibility for Enhanced STAR, the program’s income limit is increased by Social Security’s cost-of-living adjustment every year. Through REBATE-NY, the Senate would also annually raise both the Basic and Enhanced STAR exemptions based upon growth in local home values. Through this regular increase, school property taxpayers on LI would save another $71 million each year.
The STAR program was created in 1997. Every homeowner is eligible to receive the Basic STAR exemption, while seniors who are 65 years of age and have a household income of $66,050, or less, qualify for the larger Enhanced STAR exemption. Currently, STAR saves Long Island homeowners $710 million each year. This is 28% of STAR’s statewide property tax savings and approximately twice Long Island’s share of the state’s population.
AVERAGE STAR SAVINGS ON LONG ISLAND
Basic STAR Enhanced STAR
Nassau County $1,000 $1760
Suffolk County $970 $1480
"Providing substantial property tax relief with the plan we are unveiling today will continue to be the Senate’s top priority in the next session. This plan would give relief to struggling homeowners in the form of direct rebates and would also control costs at the local level that impact property taxes," Flanagan concluded.
Highlights of the 25 point plan include:
· $1.9 billion in direct rebate checks to property taxpayers;
· Adjusting the STAR exemption to account for increased property assessments, saving property taxpayers an additional $250 million;
· Enhancing the property tax circuit breaker for homeowners to save an additional $100 million;
· Limiting school budgets to one district vote, saving taxpayers approximately $150 million;and
· Expanded municipal shared services program
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