Cuomo: No STAR rebate for tax delinquents

ALBANY — If you’re more than one year late paying your school taxes, you will lose the state tax credit that goes with it, under a new proposal by Gov. Andrew M. Cuomo.

Under the School Tax Relief initiative, commonly known as STAR benefits, homeowners with $500,000 or less in household income can get the first $30,000 of their house’s value exempted from school taxes. The program was put in place more than 20 years ago.

"These benefits are meant to help responsible taxpayers pay their school tax bill, and if someone is not paying their fair share, they should not be entitled to STAR — period," Cuomo, a Democrat, said in a statement. "By closing this loophole, New York will crack down on bad actors and help ensure these benefits go toward the hardworking taxpayers who deserve them."

The STAR credit comes in different forms: Homeowners who earn less than $250,000 get a lower tax bill upfront; those between $250,000 and $500,000 get a rebate check. Gradually, the state has been shifting more people toward checks and Cuomo wants to continue by lowering the first threshold to incomes of $200,000 or less.

All new homeowners, with incomes below $500,000, are eligible for the rebate program, but must first apply online.

The shift to rebates enables the Cuomo administration to count the checks as revenue rather than expense (because it comes off a person’s income taxes) and, thereby, lower the growth of the state budget.

The checks can be worth hundreds of dollars and are generally larger than a smaller rebate homeowners receive if their school district adheres to the state’s 2% property-tax cap. Senior citizens can receive even greater STAR credits. The state spends about $3 billion per year on STAR.

But recent reports by the Syracuse Post-Standard newspaper highlighted a distinct problem with the shift to the rebate check initiative: Checks were going out to homeowners even if they didn’t pay their school taxes.

At a state legislative hearing earlier this month, Tax Department officials said they had no authority to halt the checks even in such circumstances.

Cuomo sought to remedy the issue in his 2020-21 state budget proposal, unveiled Tuesday, by giving the Tax Department, working with local assessors, the ability to determine if someone is more than one year in arrears. The agency cited the newspaper’s reports for prompting the proposal.

The governor’s proposal would give the delinquent taxpayer 30 days to pay and not lose STAR benefits. There was no immediate estimate on how many delinquent homeowners might be subject to losing STAR benefits.

A key legislator applauded the initiative.

“It isn’t fair to get money to help you pay your taxes when you haven’t paid your taxes,” Assemb. Sandra Galef (D-Ossining), chairwoman of the Committee on Real Property Taxation and the lawmaker who led the January hearing on STAR, said Thursday.

Galef and other legislators said they would weigh the STAR initiative as part of budget negotiations. Lawmakers are supposed to adopt a financial plan by April 1, the start of New York’s 2020-21 fiscal year.

Correction: Homeowners with incomes below $500,000 who are seeking to enroll in the School Tax Relief (STAR) program must first apply online. An earlier version of this story omitted the requirements to get into the program.