Circuit Breaker; Property Tax Cap, Senior STAR Rebate Check to Provide Comprehensive Tax Relief
Comprehensive legislation aimed at providing real property tax relief to residents on Long Island and across New York State overwhelmingly passed the state Senate yesterday, Senator Craig M. Johnson, (D-Nassau), announced.
The legislation (S.6212), which Senator Johnson helped sponsor, restores STAR property tax rebate checks for senior homeowners earning less than $150,000, creates a “circuit breaker” property tax rebate for the middle class, and caps local school property tax increases.
“This is a balanced and realistic plan that will greatly help the many Nassau taxpayers who find themselves house rich, cash poor and struggling under the crushing burden of their increasing property tax bill,” Senator Johnson said. “I urge my colleagues in the Assembly to quickly consider this extremely important legislation that will deliver real tax relief to the middle class families that need it the most, help seniors afford to stay in their homes, and cap and control property taxes that have spiraled out of control.”
The circuit breaker tax credit would provide targeted tax relief to households earning up to $250,000 per year that pay more than a threshold percentage of their income on property taxes. The tax credit is equal to 30 percent of property tax payments over the threshold percentage. Eligibility will be determined based on a formula in which the circuit breaker takes effect when spending on property taxes exceeds 7 percent of the first $120,000 of income, 8 percent of the next $55,000, and 9 percent of the excess, up to a total income of $250,000.
This circuit breaker will benefit more than 1.6 million New York State households – 41,758 of which are in the 7th Senate District. The average circuit breaker rebate for these families in the 7th Senate District is $1,783.
This legislation also provides direct property tax relief to senior homeowners by restoring the STAR rebate checks for seniors with household incomes of $150,000, or less. In order to provide immediate and guaranteed relief to seniors, but avoid potential “double-dipping,” the bill requires that the amount of the STAR rebate check received be subtracted from the total property taxes paid, in order to calculate eligibility for a circuit breaker on the recipient’s 2010 state income taxes.
Finally, the legislation established a “cap” on school property tax cap increases. The cap is the lesser of 4 percent more than the total amount of taxes levied for the prior school year, or 120 percent of the consumer price index. Any school tax levy exceeding the cap (an “override”) must be approved by 55 percent of school district voters, while a school budget that falls within the cap only requires the approval of 50 percent of the voters.
Senator Johnson and members of the Senate Democratic Conference attempted to bring a version of this tax relief plan to a vote in 2008, but was blocked by Senate Republicans. This week’s vote was approved 58-1.
This measure follows the passage earlier in the week of a package of measures designed to cut costs for local schools and tackle tax-hiking unfunded mandates.
“In order to relieve pressures on school tax levies, we must do everything we can to help districts reduce spending and become more efficient” Senator Johnson said.
“Though more work needs to be done, this legislative package will greatly help in achieving these goals.”
That mandate relief package includes:
•Education Mandate Relief Act of 2010, which prohibits the imposition of new mandates on districts after the passage of school budgets, and allows increased shared services through BOCES, among other measures.
• The Paperwork Reduction Act, which required the state Education Commissioner to establish a unified electronic data collection system in order to reduce the enormous costs of paperwork, mailing, processing and filing done by the department and schools.
• Universal Pre-Kindergarten Flexibility Act, which permits a school district eligible for a universal pre-Kindergarten grant, but which may be unable to fill some allocated funding slots, the ability to utilize unspent funds in alternative ways, such as creating full-day slots and supporting the cost of transporting pre-K students.
• Flexibility in Claims Auditing, which maintains a high standard of oversight while allowing for efficient and cost-effective processing and payment of claims. Under current law, school districts’ bills cannot be paid until they have been verified by the full school board, which is oftentimes a lengthy and convoluted process, which results in additional costs and resources to the district. Additionally, while the school board is allowed to appoint a claims auditor responsible for verifying requests for payment, because many school districts have just one person in that role, illness or resignation impedes the district’s ability to pay its claims. This bill allows school districts to appoint a deputy claims auditor and clarifies the process by which BOCES may be used to perform claims auditing functions.