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STAR exemptions impacted by 2% tax cap
By Lee Chowaniec
Aug 9, 2011, 11:20
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Wasn’t in but a short while ago that the 2% property tax cap was ordained and 75% of New York State residents supported the law believing it was a righteous attempt to provide tax relief for overburdened property owners? It didn’t take long to see that numerous exemptions would be added to the ordinance and erode its intent. One thing is for certain, the 2% cap will impact the New York State School Tax Relief Program (STAR) and further burden taxpayers.

Lancaster Town Assessor Dave Marrano made a presentation at the Lancaster Central School District (LCSD) Monday evening to demonstrate how STAR would be computed with the tax cap in place and how residents paying higher taxes should not expect to see proportionate increases in their STAR exemptions.

Mr. Marrano reviewed the two STAR programs available to the public:

Basic STAR is available to all homeowners on their primary residence. The income of owners must be below $500,000 and the current exemption is $30,100 if the community equalization rate is at 100% - which Lancaster is.

Enhanced or Senior STAR is available to all homeowners on their primary residence if one owner is over age 65 and the income of owners is below $79,050. The current exemption is $60,000 if the community is at 100% equalization rate. It does not affect Aged School Exemption.

Mr. Marrano informed the attendees that the adopted New York State budget established a new 2% cap on increases in STAR savings. The 2% caps the increase in STAR savings allowed on the STAR exemption regardless of the increase experienced with the tax rate increase from the previous year.

The increased STAR is no longer equal to assessment exemption times the tax rate. The increase in the STAR amount is capped at a 2% increase in the value of the STAR exemption. To make this clear to the attendees, Marrano provided a work sheet that gave examples and clarified how the cap would work.

Doing he math

The examples are based on a property assessed at $100,000 and where the equalization rate was 100% (based on market value from comparable home sales).

In 2010, the school tax rate was $14.67 per thousand dollars of assessed property value. Those getting a Basic STAR relief of $30,000 realized a $30 x $14.67 reduction of $440.10 to their tax bill.

Those property owners 65 or over received a $60,100 exemption. Their school tax relief amounted to $60.1 x $14.67 or $899.

In the 2011 school budget the tax levy increased by 8.90% and the tax rate increased to $15.97563 per thousand dollars of assessed valuation. The basic STAR exemption again is $30,000 and the Enhanced STAR exemption is $60,100.

Following the assessment exemption formula Basic STAR should be 15.97563 x $30,000, or $479.27.

Following the exemption formula Enhanced STAR should be 15.97563 x $60,100 or, $960.14.

However, the new formula is based on a 2% cap on the savings of the previous year – for Basic STAR $440.1 x 0.02 = $9. So, for Basic Star the recipient will not receive $479.27, but $449.1, a loss of $30.

Instead of receiving an Enhanced STAR exemption of $960.14 based on assessment, the recipient will receive an exemption of $899 based on a 2% cap on the previous year’s STAR savings – not based on the tax rate and the assessment amount. This property owner will lose $61.14 in the process.

Say thank you to Governor Cuomo and his merry band of dysfunctional Legislators for once again picking our pockets.


There are somewhere around 9,000 homeowners that receive Basic STAR, 3,000 that receive Enhanced STAR.

With this piece of legislation the State is likely to increase its revenue stream by a half-million dollars in the Lancaster Central School District alone.

Throw in all the other exemptions that are now being considered and you can be assured that the taxpayer pocketbooks will once again be picked. A 2% tax cap seemed too good to be true when first proposed. It was too good to be true!

With the stock market in great decline taxpayers will again get zapped by having to pay more toward the retirement programs for the public sector.

Ah yes, the taxpayers get ripped again having to pay more to give to others.

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