SARANAC LAKE - Gov. David Paterson has proposed eliminating the state's School Tax Relief rebate checks in the 2009-10 budget.
The total cost of the STAR program would fall from $4.8 billion to $3.25 billion, and about three-quarters of the savings comes from getting rid of the rebate checks.
The Basic STAR program exempts the first $30,000 of a home's full assessed values from school property taxes. Statewide, 2.8 million homeowners are expected to benefit from this in 2009-10, for an average savings of $629. Enhanced STAR (sometimes called Senior STAR) is for homeowners aged 65 or older with incomes below $73,000 a year; the first $60,100 is exempted. About 634,000 seniors qualify for this, with an average savings of $1,145.
Sen. Betty Little
The average rebate checks in the 2008-09 budget were $386 for Basic STAR recipients and $458 for Enhanced.
"Eliminating the STAR rebate program will, in effect, result in a property tax increase for homeowners," said Dan Mac Entee, spokesman for state Sen. Betty Little, R-Queensbury. "That's going to be less money coming from the state to the local property taxpayer."
Mac Entee said Little has long advocated changing the STAR program, but in ways that will reduce property taxes on middle-class homeowners. She has been a strong advocate of a "circuit breaker" program that would cap property tax payments based on income, with the state refunding the excess.
"It might be more fair in trying to address the issue," Mac Entee said. "We don't see that in this budget."
"I am not sure how much the STAR rebates have meant to most people," said state Assemblywoman Janet Duprey, R-Peru. "The checks themselves are certainly the smallest part of the whole STAR program."
Duprey said she was more concerned about the overall impact of a wide variety of fee increases on the middle class. Paterson has proposed 88 new or increased fees. For example, the sales tax exemption on shoes and clothing costing under $115 will be eliminated, an 18 percent tax will be placed on non-diet sodas, the cost to renew a driver's license will go to $62.50 from $50, vehicle registration will go from $44 to $55, and people fishing for trout and salmon will be required to get a $10 stamp in addition to a regular fishing license.
"We are balancing the budget on the middle class," she said. "No one group should take the hardest blow."
"We are not in favor of raising taxes, but, given the size of the deficit, it may be difficult to avoid raising some taxes and fees," Mac Entee said. "But, to the extent possible, we would like to mitigate that from what the governor has proposed."
Duprey said the state may have to revisit the idea of a tax increase on those making more than $1 million annually, or else some other across-the-board increase in income or sales taxes, to make sure the pain is equally distributed.
Another way to reduce property taxes, Mac Entee said, would be to do away with some of the unfunded mandates the state imposes on school districts.
"There has been a lot of talk about mandate relief," he said. "We need to start acting."
Mac Entee said Little had previously proposed and plans to reintroduce a constitutional amendment making compliance with most unfunded mandates voluntary.
Little's name was mentioned in the context of STAR after a PBS broadcast of Paterson's budget speech Tuesday morning, when PBS host Susan Arbitter related a story Little had told about the importance of STAR. Reportedly, Little was speaking with a constituent and said she hoped she wouldn't be around if STAR ever goes away.
"Don't worry, honey, you won't be!" the constituent is said to have replied.
Contact Nathan Brown at (518) 891-2600 ext. 26 or firstname.lastname@example.org.