Long Island homeowners could receive rebate checks this fall to offset their school taxes if the State Legislature approves a $2.2 billion plan in Gov. Kathy Hochul’s budget proposal.
The rebates, announced earlier this week in the governor’s budget speech, are aimed at households that receive the School Tax Relief, or STAR, credit or exemption with incomes at or below $250,000 and seniors who qualify for enhanced STAR. A similar property-tax credit, which had allowed incomes up to $275,000, expired in 2019.
WHAT TO KNOW
- Gov. Kathy Hochul included a $2.2 billion property tax credit as part of her budget proposal for fiscal 2023, which starts April 1.
- If approved by the State Legislature, the rebates for households that receive the School Tax Relief, or STAR, credit or exemption would average $970 outside New York City.
- The money would be sent to homeowners with household incomes of $250,000 or less through checks this fall.
"At a time when inflation is robbing families of long-awaited gains and income, and recognizing that property taxes are still too high, we will provide a $2 billion property tax rebate to more than 2 million middle-class homeowners," she said.
Because the rebates are tied to property taxes, the largest checks will likely go to homeowners on Long Island and in the Hudson Valley, where property values and associated taxes are highest, said Patrick Orecki, director of state studies at the Citizens Budget Commission in Manhattan. Lower-income households would generally receive higher rebates under the plan. But if two homeowners earn the same income, the one paying more in property taxes would receive a higher rebate. The plan also cuts out renters entirely, he noted.
"Our concern with a program like this is it will give the greatest benefit to wealthier areas. It’s not a terribly well-targeted program if you’re trying to provide relief to areas with the most need," Orecki said. "The question for the governor and Legislature to contemplate over the next two and half months is [whether] this is the best use of $2.2 billion in this year’s budget," Orecki said.
School taxes make up more than 60% of homeowners’ property tax bills, and last week state Comptroller Thomas DiNapoli said increases would be capped at 2% for the 2022-23 academic year, up from 1.23% this year. A 60% majority from local voters is required for a district to exceed the cap.
The property tax rebate will be calculated as a percentage of a homeowner’s STAR benefit, according to the governor’s office. The money will be delivered as an advanced credit for Tax Year 2022 beginning in the fall instead of recipients waiting to receive the funds when they file tax returns the following year.
The state estimates there are 2 million property tax-paying households outside New York City that are eligible, and their average benefit would be $970. Those who earn less than $75,000 would receive an average credit of $1,050.
State Sen. Phil Boyle, of Bay Shore, said he supports the tax credit. Boyle, a Republican member of the Senate’s housing committee who represents parts of the Towns of Babylon and Islip, said the tax credit could carry some political benefit for Democrat Hochul, with checks arriving ahead of the gubernatorial election in November.
"I think Gov. Hochul’s property tax rebate proposal is one area of her budget that should receive strong bipartisan support," he told Newsday. "It will help countless Long Island homeowners. Given the high property tax burden on Long Island, every bit helps."
Hochul’s budget proposal also includes funding for housing development as Long Island confronts a record low number of homes for sale. The five-year, $25 billion housing plan commits $1.5 billion statewide for supportive housing units aimed at reducing homelessness, $1 billion for new multifamily rental housing, $300 million for senior housing, $90 million for new middle-income housing, $80 million for mixed-use affordable housing development and $150 million to renovate public housing outside New York City.
Boyle said while he agrees there is the need for some government support for development, Democrats in Albany have relied too heavily on those subsidies in the past. "It should be limited," he said. "Lessening regulations for developers will clear the way for more housing stock."
The governor committed $400 million in that five-year plan to homeownership programs designed to create and preserve affordable housing for low- and moderate-income New Yorkers.
The state is already administering a separate $539 million federal program, the Homeowner Assistance Fund, to provide aid to New Yorkers at risk of losing their homes because they're behind on mortgage, tax or utility payments.
The budget funds the $20 million Homeowner Protection Program, which funds nonprofits providing counseling on mortgages and foreclosure prevention and $35 million to fund free legal assistance for low-income renters outside New York City facing eviction.
The governor also dedicated $2 million to fair housing testing and education. Through the testing, nonprofits hire people to pose as prospective renters or buyers to identify individuals or organizations engaging in housing discrimination. New York State increased its commitment to testing for housing discrimination following Newsday’s Long Island Divided series, which uncovered evidence of discrimination against Black, Hispanic and Asian homebuyers.
The State Legislature must approve the budget by April 1, when fiscal year 2023 begins.