Enhanced STAR may change for seniors

Joseph Spector
Albany Bureau Chief

ALBANY -- Senior citizens in New York who are accustomed to verifying their income locally so they are eligible for a STAR property-tax break each year may have to change their plans.

Gov. Andrew Cuomo is proposing that all seniors eligible for the Enhanced STAR program would have to register with the state tax department rather than the local assessor for the school-tax break.

The measure is aimed at streamlining the complex task of determining who should receive the tax break and limit abuse of the system, state officials said.

But local assessors are criticizing the change, saying it would confuse seniors and make it more difficult to claim the tax breaks.

"It is ridiculous," said Teri Ross, the assessor in Queensbury, Warren County, who is president of the state Assessors' Association.

"This is another hoop that seniors would have to go through."

That's not all: Under Cuomo's plan, the STAR benefits for all recipients in New York would not increase the 2 percent they had been each year. The benefits would be frozen at current levels.

Cuomo indicated that the growth in property taxes have been limited by the state's tax cap, as well as other rebate programs to help lessen the burden of property taxes.

"The significant reduction in property-tax growth resulting from the property-tax cap and the ramp up of the new Property Tax Relief Credit have diminished the necessity of growing the STAR benefit," Cuomo's budget proposal said.

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Another STAR change?

The proposal, which is part of Cuomo's budget for the fiscal year that starts April 1, comes after assessors and STAR recipients were angered after a change to the program last year.

The change turned the STAR rebate from an upfront savings on homeowners' tax bills to a check in the mail for new homeowners to pay their school taxes by last Sept. 30.

But the initiative has been beset by problems: Some checks had incorrect amounts, and some homeowners said they are still waiting for the checks.

Now assessors are questioning whether the state Department of Taxation and Finance could pull off the new proposal.

"It’s complicated enough. We don’t need to make it more complicated," said Jay Franklin, director of the Tompkins County Department of Assessment.

What would change

New York spends about $3 billion a year on the most expensive property-tax-rebate program in the nation. The program offsets a portion of homeowners' school taxes -- which are among the highest in the country.

For those eligible, the average basic STAR credit last year was $750, while the average Enhanced STAR was about $1,400 for eligible seniors.

About 650,000 New Yorkers receive Enhanced STAR every year.

It is available to homeowners on their primary residence who are age 65 and older and whose household income is less than $86,000.

Seniors can go to the local assessor's office by March 1 to register for the program each year or, if they file income tax returns each year, they can automatically register through the state -- called the Income Verification Program.

So here's the proposed change: Cuomo would make it mandatory to register with the state -- not the local assessor -- to be eligible for Enhanced STAR.

For those seniors who do not file income taxes each year, the state would set up an applicant process to verify their income. Currently, the assessor handles their applications.

The state said the change would be beneficial.

“Enrolling all Enhanced STAR recipients in the Income Verification Program will save them time and maximize the benefit while minimizing waste," said Freeman Klopott, a spokesman for the state Budget Division.

"Since the verification program became an option in 2003, approximately half of all Enhanced STAR recipients have enrolled, a testament to the program’s simplicity and overall benefit.”

Exterior view of the state Capitol in the morning fog on the opening day of the legislative session on Wednesday, Jan. 4, 2017, in Albany, N.Y.

Complicated process

If only it were that simple, though.

Many low-income seniors get Enhanced STAR and do not file tax returns -- mainly people on Social Security who may also get a small pension.

Some of them also get property-tax breaks through their local governments for municipal and school taxes: called a senior citizens exemption.

And the eligibility for that program would still be run through the local assessors. The local tax breaks are for people whose income is less than $37,399 a year.

So instead of a senior applying for both programs at their town hall, they would have to apply for Enhanced STAR with the state and the local tax breaks with their municipality.

The change seems redundant and onerous, assessors said.

"We want to make sure they get the largest exemption," Franklin said. "We don’t want a senior to apply twice."

What's next

The Assessors Association said it will fight Cuomo's proposal, and it is also seeking an end to new homeowners getting the STAR rebates as checks rather than as upfront savings on their tax bills.

Lawmakers, too, want the tax department to nix the STAR checks for new homeowners, and legislators in previous years have rejected Cuomo's efforts to stop the 2 percent increase in STAR benefits.

The state Senate last week passed a bill that would compensate taxpayers who haven't received their STAR checks and thus may be late on their school taxes.

The bill would require STAR checks to be postmarked by Sept. 15 each year so property owners could pay their school taxes by Sept. 30, which is the deadline in most districts.

If the checks are late, the state would have to pay interest to the people.

“The rebate is supposed to be pre-paid to homeowners before their school tax bill is due, but many hardworking property taxpayers have been frustrated with the delay," said Sen. Cathy Young, R-Olean, Cattaraugus County.

The Assembly is also calling for the end to the STAR rebate checks and is considering similar legislation.

“The changes to the STAR program have been a failure,” Assemblywoman Sandra Galef, D-Ossining, Westchester County, said.