Suffolk County News - Islip Bulletin: An Attempt to Create More Tax Relief

State Senators Seek to Restore STAR Rebate

By JEFFREY BESSEN

April 23, 2009 

The license plate of one of the two cars sitting in Kecia Davis-Reams’ driveway reads “MINDBLWR” and mind blowing is a word most Long Island residents would use to describe the amount of taxes they pay.

In an effort to help taxpayers receive more money in return, State Senator Brian X. Foley (D-Blue Point), along with fellow Long Islander, State Senator Craig Johnson (D-Port Washington), and Deputy State Majority Leader Jeff Klein (D-Bronx), unveiled plans to restore the STAR (School Tax Relief) rebate check for 2009 that was sliced out of the state’s budget.

Standing in front of Davis-Reams’ home on Root Avenue, which she shares with her husband Doug and 5-year-old son, the former Prospect Heights resident said that if the rebate was restored, she would receive an additional $2,700 that would help to defray her tax bill.

“When I started, our taxes were a little over five thousand, now they are over seven thousand. I am afraid if they hit ten thousand,” Davis-Reams said. “It’s really hard. I tried to buy something I could afford,” she added, noting that she wanted her son to have a backyard. 

Based on figures provided by the state senators, Suffolk County residents pay the fifth highest average property taxes at $6,502, while Westchester and Nassau counties, respectively, pay the highest, with an average of $7,908 and $7,726.

The proposed Klein-Johnson-Foley bill includes three elements; restoration of the STAR rebate check, a circuit breaker tax credit and mandated relief for school districts.

“This house is emblematic of the real, substantial savings realized by this legislation,” said Foley, who noted he and his colleagues seek to “hit the ground running” with these proposals this week “to change a system that has been crying for change.”

Approximately $1.5 billion is needed, according to the legislators, to restore the STAR rebate (STAR and Enhanced STAR remain on the books). To fund the restoration, they are seeking $600 million from the so-called Rainy Day Fund ($175 million) and the Tax Stabilization Reserve Fund ($1.031 billion).

Along with $500 million garnered from cigarette tax revenue sharing (S1906, a Klein-sponsored bill), $184 million from new video lottery terminal (VLT) games (S706, another Klein-sponsored piece of legislation) and $375 million in upfront payments for VLTs at Belmont Race Track (S2827, Johnson-sponsored bill).

The lawmakers also seek funding due the state from rebate parity for generic drugs ($27.5 million) and $400 million from a tax amnesty program that would waive penalties and reduce interest rates for full payment. The last such program collected more than $525 million in gross revenues.

“The time is now to keep the dream of homeownership alive not just for this generation, but for the next,” said Klein, who added that part of this proposed legislation is eliminating the State Education Department’s unfunded mandates that school districts must pay for and that cost is passed onto the taxpayers.

Klein noted that transportation costs are based on per pupil, not the exact amount of students that use the school buses, costing individual districts $10,000 for a statewide total of $ 1 million.

The circuit breaker tax credit would provide relief in 2010 to households earning up to $250,000 per year and paying more than a “threshold percentage” of their income on local school taxes. This threshold of 6, 7 or 8 percent would be based on rising household categories.

Based on the legislators’ proposal, a homeowner earning $40,000 per year and paying $8,000 in school taxes (or 20 percent of their income) would receive an estimated $3,920 in tax credits. “We can use tax breaks just like the companies want tax breaks,” Davis-Reams said.

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