May 31, 2011 Erin Wisneski Uncategorized
New York State is gearing up to send municipalities another unfunded mandate, one that could cause some serious problems for school districts.
The Senate recently passed Legislation (S.3576), which would extend the deadlines for basic and enhanced School Tax Relief (STAR) discounts. The intent is to make it easier for property owners to claim STAR benefits if they miss the March 1 filing deadlines, especially senior citizens who must remember to file for the enhanced STAR exemption each year.
According to the NYS Office of Real Property Tax Services website (orps.state.ny.us), STAR provides New York homeowners with partial exemptions from school property taxes. Basic STAR is available for owner-occupied, primary residences with qualifying income and exempts the first $30,000 of the full value of a home from school taxes. Enhanced STAR provides an increased benefit for the primary residences of senior citizens (age 65 and older) with qualifying incomes exempting the first $60,100 of the full value of their home from school taxes.
“In this difficult economic time, we need to ensure that those who are eligible for the STAR exemptions receive those benefits even if they miss the deadline,” said Sen. Jack M. Martins, a supporter of the bill. “These exemptions are extremely important to many of our residents.”
Should the application deadline be missed, it could result in a homeowner facing an unexpected and significantly increased tax bill. This bill instead authorizes municipalities to accept STAR applications after the locality’s taxable status date and before Jan. 10 of the following year.
While this bill would help residents who fail to file the STAR application by March 1, it seems it would cause more problems than benefits.
According to Theresa Golden, assessor for the towns of Van Buren and Lysander, the extended deadline would create a lot more work not only for assessors’ offices across the state, but for municipal tax receivers’ offices, counties and school districts in New York.
As the law stands now, the tax roles are finalized as of July 1 every year including any STAR exemptions. This enables school districts to establish a tax rate based on the taxable value of a district, and then send out tax bills in August, which are due in September. Should the application extension go into effect, the taxable value of the district would change as late as January and districts would have to credit or refund monies to taxpayers. And it’s a time consuming process for all four entities, Golden said. The paperwork has to be corrected in the assessor’s office, then sent to the county for approval, then to the district for approval and finally to the tax receiver’s office who reissues the bill.
While the school districts are supposed to be reimbursed by the state, the refund isn’t guaranteed as was evident with this year’s budget and the shortfall many school districts faced.
There is a loophole. The text of the bill allows local government to choose whether to adopt the law. Golden said as long as municipalities see the big picture, the extra trouble can be avoided. In fact, it might be better for municipalities to be proactive in ensuring senior citizens receive enhanced STAR. Golden’s office currently sends out renewal applications to eligible residents in the fall, then follows up with reminder letters in January to those who haven’t submitted their application.
“Giving everyone extra time to file is a good thing until you look at the big picture and the problems it will create,” Golden said. “You wonder what they were thinking in Albany.”
The bill was sent to the New York State Assembly, who referred it to real property taxation.