Veterans' tax exemptions have LI school boards struggling

School districts across Long Island are struggling with whether to enact a new property tax exemption to assist veterans and in the process put a greater burden on nonveteran taxpayers.

Gov. Andrew M. Cuomo in December signed legislation giving school boards the authority to grant property tax exemptions to veterans who have served in wartime — similar to provisions shared by many municipal taxing jurisdictions.

Several Long Island school officials said they were not made aware of the law until late January or February, which left little time to research the potential impact before the deadline — March 1 in most municipalities — to implement the exemption for the 2014-15 school year.

Unlike the popular New York State School Tax Relief Program (STAR) exemption, the state does not reimburse districts with revenue lost from the veterans' exemptions. Nonveteran taxpayers in the district would make up the difference, which several school officials say forces boards to favor one group of taxpayers over others.

"The state, if they wanted to provide tax relief certainly for these people who have been on the front lines for our country, then they should have budgeted for it so that every veteran in the state gets an equal shot," said Jennifer Thompson, vice president of the Northport-East Northport school board. "This should never have been communities having to place a dollar value on the great courage it takes to fight for our country's freedom."

The law requires school boards considering the measure to hold a public hearing before voting on whether to grant exemptions of 15 percent to veterans who served during a war, another 10 percent for those who served in combat zones and additional reductions for service-related disabilities. Parents of veterans who died in combat would qualify for a 15 percent or 25 percent Gold Star Parent exemption under the law.

School boards were given the authority to issue partial exemptions or increase the amount within the guidelines of the law — giving districts more flexibility to determine what nonveteran residents can afford.

The veterans' exemptions are not affected by the state's 2 percent tax cap, nor do they raise the total amount of taxes, school officials said.

In Nassau County, 37 of 54 school districts reporting to the county have approved allowing an exemption, according to statistics provided by Brian Nevin, spokesman for County Executive Edward Mangano. Comparable figures are not available for Suffolk County, where the towns, not the county, are responsible for assessments and exemptions.

State Department of Taxation and Finance data from 2012 — the most recent figures available — show wartime veterans own more than 445,000 homes in the state that have existing property tax exemptions, which reduces assessments by $18 billion.

Nassau County has a Jan. 2 deadline for determining every property owner's eligibility for tax exemptions, according to a letter that Acting Nassau County Assessor James E. Davis sent to school officials. The date is set by state law and cannot be changed, Nevin said.

That means any school board approvals this year will be applied to the 2015-16 tax bills, Davis said.

"We had very little time to gather information . . . We needed to understand what it meant," said Roberta Gerold, superintendent of the Middle Country Central School District.

Explaining the exemption to residents at the same time districts are setting next year's budgets created confusion, she said.

Middle Country's school board approved the basic exemption for veterans and Gold Star parents.

"It's like a no-win . . . Someone's going to be frustrated by it," said Gerold, who is also president of the Suffolk County School Superintendents Association. And the fear is that "if people are upset that a district adopted or didn't adopt the veterans tax exemption, they can take their frustration out on the school budget vote."

Exemptions approved

Long Island school boards have addressed the exemption in different ways.

Some districts, including North Bellmore, Farmingdale, Kings Park, Connetquot, Uniondale, William Floyd, Plainview-Old Bethpage, Northport-East Northport, North Merrick and Levittown, approved both the basic exemptions for veterans and Gold Star Parent exemptions.

"We thought this was the right thing to do . . . This community was built for returning veterans from World War II," said Levittown school board president Kevin Regan. "One of the considerations is we have a lot of young men and women coming home from Afghanistan and Iraq."

The Levittown district has 837 noncombat veterans, 628 combat veterans and 97 veterans with service-connected disabilities, said William Pastore, assistant superintendent for business and finance.

Nonveteran homeowners in Levittown will see an average annual increase of $55.11 in next year's school tax bill and another $2.99 in the library tax bill, he said.

Some districts, including Longwood and Valley Stream 13, approved reduced exemptions.

The Valley Stream 13 board approved 50 percent of the basic exemption to qualified veterans who own homes or residential co-ops within the district, Superintendent Adrienne Robb-Fund said.

"While the Board believes it is important to honor the contributions of our community's veterans, it was also important to remain mindful of the impact the decision will have on the remainder of our community residents whose property taxes will increase as a result of this decision," she said in a statement.

There are about 800 eligible veterans in Valley Stream 13's school district. The exemption will have an estimated average impact on nonveteran taxes of $20.02, school officials said.

And several districts, including Long Beach, Roosevelt, and Hampton Bays, decided to not yet address the exemption.

Long Beach didn't consider the exemption, partly because the board "identified questions about the legal implications this legislation would have on future boards, including their ability to rescind the decision," Superintendent David Weiss said in a statement.

Hampton Bays Superintendent Lars Clemensen said the board had to weigh the needs of its community members and veterans. Clemensen said the board also wanted to fully study the law's potential impact and wait until many homeowners who are away during the winter returned to take part in the discussion.

Clemensen estimated that the average Hampton Bays home valued at about $450,000 could see a property tax increase of $60 to $70 annually for nonveterans, depending on the level of exemption adopted.

"That's not an insignificant amount in this economy," he said.

Huntington Town Assessor Roger D. Ramme estimated that the potential impact on nonveteran homes throughout the town represented about $5 million.

The governor signed the bill, which passed unanimously in both houses of the legislature, "because it gives school districts the same opportunity — already granted to counties, cities, towns and villages under existing law — to recognize the great contributions and sacrifices veterans make for our country," Cuomo spokeswoman Dani Lever said.

Assemb. Steve Englebright (D-Setauket), a bill co-sponsor, said he could "sympathize" with the "legitimate concern" about the tax burden being pushed to nonveterans. But the bill focused on "what difficulties many veterans face with property taxes. Some of them suffered from their service, from wounds and injuries. It affected, in some cases, their earning capacity."

Assemb. Thomas Abinanti (D-Greenburgh) is drafting legislation requiring the state to pay the cost of implementing the exemption, his spokesman said.

"It is becoming clear that there will be a significant shift in tax burden to the nonveteran property taxpayers in many school districts — especially in small school districts," Abinanti said in a letter to Cuomo.

The Comsewogue school district last month approved the basic exemption, which board president John Swenning said most residents support despite a median tax increase of $67.20 for nonveterans.

"We have to do what we have to do for the veterans," he said.

Nelson Lopez, 46, a Suffolk County police officer who served in the Navy during the first Gulf War, said he gathered more than 300 signatures on a petition asking the Comsewogue board to pass the exemption.

The increase for nonveterans is the equivalent of "a cup of Starbucks coffee a month," said Lopez, of Port Jefferson Station.

But Eugene Leavy, 88, of East Northport, who served in the Army's 100th Infantry Division during World War II, said he opposed the tax exemption.

"I just don't think that because you answered the call . . . that now you should sit back and say, 'Oh, give me stuff, even if my neighbors have to pay for it,' " he said. "Long Island taxes are already up to your chin."

Vietnam War veteran John Barry Scheu, 68, of Levittown, who said he receives disability benefits from being wounded while serving in the Navy, said the exemption was "long overdue. While other guys were home, we went and we fought."

Scheu, commander of the Veterans of Foreign Wars Post 9592 in Levittown, said the exemption assists young veterans trying to buy a home, as well as senior veterans on fixed incomes.

The long-term effects of the law could be "dramatic" in some communities, said Rick Timbs, executive director of Statewide School Finance Consortium, an East Syracuse-based organization that, according to its website, represents more than 400 public school districts in working to bring equity to state aid distribution.

"You don't have veterans sprinkled uniformly as a regular, proportional share of the population, nor is the property value the same . . . some of these variations could be fairly dramatic," he said. "The worry that overshadows all this, that binds this all together: Where will the transfer of tax burden occur? And where will it be palatable?"

WHO IS ELIGIBLE FOR VETERAN EXEMPTIONS

Must have served during wartime:

-Persian Gulf conflict: Aug. 2, 1990, to present

-Vietnam War: Feb. 28, 1961, to May 7, 1975

-Korean War: June 27, 1950, to Jan. 31, 1955

-World War II: Dec. 7, 1941, to Dec. 31, 1946

Other veterans who may qualify:

-Veterans who received an Armed Forces Expeditionary Medal, a Navy, Marine Corps, or Global War on Terrorism Expeditionary Medal (not Service Medal)

-Veterans of World War II in U.S. Merchant Marine

-Civilians during World War II in either the American Field Service under U. S. Armies and the U.S. Army Groups, or as a flight crew and aviation ground support employee of Pan American Airlines' contract with the Air Transport Command

-A member of the reserve component of the Armed Forces who received an honorable discharge from active duty, but is still a member of the reserves, with other requirements. 

SOURCE: New York State Department of Taxation and Finance