Senator Saland's School Property Tax Reduction Act Passes The Senate

Stephen M. Saland

June 22, 2006

Senator Steve Saland (R,C Poughkeepsie) today announced that his "School Property Tax Reduction Act" aimed to provide $9 billion over five years in tax relief to overburdened taxpayers has passed the Senate. The legislation would reduce school property taxes for primary homeowners across New York State by replacing local tax dollars with State dollars. (S.8360).

"Under the current system, a homeowner's ability to pay is not the main factor used to calculate their property tax liability," Saland said. "Instead, education funding relies heavily on property tax assessments that do not reflect household income. And while certain school districts are partially funded through a variety of local taxes, real property taxes constitute the vast majority of local revenue raised to support school districts. My proposal would provide tax-strapped homeowners with much needed relief through the gradual phase-out of the use of property taxes and instead, provide education funding from the state."

Under the Act's provisions, homeowners who voted in the last school or general election would be eligible to sign a petition. If 25 percent of those voters who are qualified to sign the petition do so, the district could then put the proposition on the ballot for a vote.

After the ballot proposition passes and a district opts into the state funded system, school districts would be required to reduce the school property taxes by 20 percent the first year, 40 percent the second year, 60 percent the third year, 80 percent the fourth year, with a total phase out by year five, except for certain new capital costs. The reduction would result from the reimbursement of state dollars back to the school district. Additionally, localities would have the option to cap the property taxes of senior citizens over the age of 70 who are eligible to receive the Enhanced STAR exemption.

"Despite the State's historic STAR program, real property taxes continue to rise throughout New York. I recognize the need to provide relief to the hardworking, overburdened taxpayers and have advanced this proposal to address a problem that is spiraling out of control," Saland said.