Property Tax Commission. Creates a new bipartisan commission to study the root causes of New York’s high property taxes, evaluate ways to increase the fairness of current property tax relief programs, identify ways to reduce local government costs, and recommend a school tax cap proposal.
STAR Program. Overall funding for the STAR program will total nearly $5 billion, an increase of $134 million over 2007-2008.
Tax Relief for Seniors. Increases property tax rebates for senior citizens participating in the Enhanced STAR program by 40 percent – a total increase of $91 million compared to last year’s levels.
Middle Class STAR Rebates. Maintains property tax rebates for all other taxpayers, excluding seniors, at the level provided in 2007-2008. Expanded participation in the program, however, will increase spending by $32 million. Combined Middle Class STAR and Enhanced STAR spending will total $1.25 billion.
Mandate Relief. Increases Wicks Law thresholds, which will help reduce property taxes by lowering construction costs. In addition, local governments will benefit from increased flexibility to form cost-saving municipal health insurance consortiums and realize purchasing savings with procurement reforms.
Preschool Special Education Cap. Caps the annual growth in local preschool special education costs for counties outside of New York City. Under this initiative, counties will realize savings of $31 million in their 2009 fiscal year, growing to $90 million by 2011-12.
Enhanced Local Revenue Flexibility. Proposes new local revenue options to help relieve pressure on property taxes. Counties will be given the option to increase mortgage recording fees, a loophole will be closed to allow cities and villages to collect gross receipts taxes on cellular phone services, and certain cities and counties will be able to implement red light camera traffic safety programs similar to that in New York City.
Local Government Efficiency. Advances a series of recommendations from the Governor’s Commission on Local Government Efficiency and Competitiveness to help local governments save property tax dollars through shared services and municipal consolidation. Key initiatives include: $25 million in Local Government Efficiency Grants with a new focus on transforming the structure of local government, financial incentives and statutory changes to promote the consolidation of both highway services and property tax administration, and an initiative to collect fiscal performance data to facilitate peer comparisons on efficiency and help identify opportunities for service consolidation.
Savings
Middle Class STAR. Delays the planned 17 percent increase in the Basic Middle Class STAR rebate for 2008-2009, saving the State $169 million. This increase would have provided the average homeowner with a benefit increase of $65.
Assessed Value Changes. Increases from 5 percent to 10 percent the maximum reduction that can occur in a taxpayer’s STAR benefit based on changes in assessed value or market value. For the 2.6 million taxpayers likely to be affected, this will reduce exemption savings by an average of $40 for a savings to the State of $110 million.
NYC Personal Income Tax Credit. The scheduled increase in the New York City personal income tax credit will be delayed by one year, producing savings of $40 million. In addition, this credit will be eliminated for New York City taxpayers with incomes above $250,000, providing savings of $20 million. If they are homeowners, these taxpayers will continue to receive the benefit of the STAR rate reduction and basic STAR benefits.