Senator Fuschillo Unveils New Property Tax Relief Plan

Senator Charles J. Fuschillo, Jr. (8th Senate District), together with Senator Dean G. Skelos (9th Senate District) and Senator Kemp Hannon (6th Senate District), today unveiled a new proposal to help alleviate the burden placed on Long Island’s property taxpayers.

When fully implemented, the program, called REBATE-NY, would provide homeowners in Nassau and Suffolk counties with $532.8 million in school tax rebate checks directly from New York State and enable them to save another $71 million through larger state school tax exemptions. In addition, REBATE-NY reforms various aspects of the school budgeting process and school district management, promotes local government efficiency and establishes a "Blue Ribbon" commission to review rising school spending and district financing.

"New York State has consistently worked to offer tax relief to homeowners and this plan will deliver a much needed package to continue those efforts," stated Senator Fuschillo. "From tax rebates that are delivered directly to New York residents to enhancing existing tax relief programs, this package will enable Long Island to fully fund the superb educational system our children enjoy while delivering needed change."

"High property taxes are a quality-of-life issue," said Senator Skelos. "The more that school districts and local governments tax homeowners, the less money parents have to provide for their families. This plan provides real relief to Long Island homeowners and it fundamentally reforms the system to ease the property tax burden in the future and provide taxpayers with greater control over school district spending."

"Increased taxes and quality public education are two big concerns of everyone living on Long Island today. I believe this rebate plan is in the best interest of all Long Islanders, because it furthers the idea behind the STAR programs, easing the burden on the taxpayer," said Senator Hannon. "Moreover, it empowers the taxpayer by providing hands on relief directly to residents, in the form of a rebate check, which will help to control costs that impact property taxes at a local level."

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 STAREnhanced STAR
Nassau County $1,000 $1,760

Suffolk County $970$1,480