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Fingers were pointing in both directions Tuesday as New York’s acting tax chief and the head of a state tax assessor’s group fielded questions about the seemingly endless delays, errors and general confusion surrounding the School Tax Relief or STAR property tax program after it was amended almost a year ago.
Nonie Manion, executive deputy commissioner of the state Department of Taxation and Finance, said that part of the problem stemmed from inaccuracies that developed when local tax assessors tried to determine whether homeowners were eligible for the exemption, which is means-tested and can save hundreds or even thousands of dollars on a school tax bill.
“Some of the (local) assessors’ rolls were perfect, but there were others that were not so good,” Manion said during testimony before a joint Senate-Assembly budget hearing on taxation.
Lawmakers, especially those in suburban and rural areas, said they continue to hear from homeowners who haven’t received STAR rebate checks under a system that was altered in the 2016-17 budget.
“You’ve created a nightmare,” said Sen. John Bonacic, R-Middletown.
“There’s a loud, vocal minority that is still hurting,” he said, referring to the numerous low-income seniors who count on their STAR breaks to help defray their tax bill.
But Teri Ross, the Queensbury assessor and president of the state Assessors Association, told lawmakers her members are “absolutely not” to blame.
The problems stemmed from a change in last year’s budget that shifted the way STAR tax breaks are paid. Since the program’s creation more than a decade ago, it has worked by taking the savings off the top of one’s school bill, which usually goes out in September. Homeowners even get a receipt showing how much they have saved under STAR.
But last year the rules were changed, retroactive to March 2015: Those who purchased homes after that time get their STAR tax break in the form of a check from the state that is supposed to arrive in the fall.
Manion, after the hearing, said they originally estimated 120,000 homeowners would be getting the checks, but 210,000 people have registered. And so far, about 107,000 checks have gone out.
The problem is that thousands of people are expecting STAR checks that they aren’t entitled to, for a number of reasons. They might have an income above $500,000, which is the cutoff for the program. Or they may have already gotten the exemption from their local school tax bill, even if they purchased their home after March 2015. Or they may be applying for a second home, while STAR is only applicable to a primary residence.
Another twist centers on the “enhanced STAR” program, in which seniors over age 65 get an additional reduction as long as their annual income falls below a certain level, which for this year is $84,500.
While Manion and Ross may be at odds over the placement of blame, both agreed that the new program has been slow and difficult to implement.
“It’s a lot of manual work,” Manion said after her testimony, referring to the process of checking to make sure people qualify for STAR exemptions.
“This whole new program was thrown on us in April, and thrown on them,” added Ross.
Lawmakers also questioned and criticized a proposal to freeze the savings people get from STAR from one year to the next. It’s currently capped at 2 percent per year.
Manion’s testimony was interrupted when a group of roughly 40 activists streamed past legislative staff to offer Occupy-style speeches and chants on a range of progressive issues — from tax-related topics such as the extension or expansion of the “millionaires tax” — a surcharge that’s slated to sunset at the end of the year — to undocumented immigrants’ rights, school funding and state support for CUNY and SUNY.
“Tax the rich, defend New York!” they chanted as they made their exit after about 10 minutes. They returned about an hour later, prompting Assemblyman Denny Farrell to threaten to lock the hearing room.
rkarlin@timesunion.com • 518-454-5758 • @RickKarlinTU
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