Tax Relief Plan Passes in State Senate

Comprehensive legislation aimed at providing real property tax relief to residents on Long Island overwhelmingly passed in the State Senate yesterday by a vote of 58-1.

The legislation (S.6212), which Senator Craig M. Johnson (D-Port Washington) 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 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 in Nassau County. The average circuit breaker rebate for these families 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 calculated 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 four 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 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.

This measure follows the passage of a package of mandates earlier in the week designed to cut costs for local schools and tackle tax-hiking unfunded mandates. It included the 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; 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; and Flexibility in Claims Auditing, which maintains a high standard of oversight while allowing for efficient and cost-effective processing and payment of claims.

"In order to relieve pressures on school tax levies, we must do everything we can to help districts reduce spending and become more efficient," Johnson said. "Though more work needs to be done, this legislative package will greatly help in achieving these goals."