New STAR Rebate Program Sets Homeowner Savings

One of the most popular programs ever enacted by the State Legislature has been the School Tax Relief program, or STAR. Since it was first enacted in 1997, many seniors pay little or no school taxes, and other homeowners have saved hundreds of dollars each year on their school taxes. While homeowners are saving money on their school taxes, school districts have not been shortchanged because New York State replaces those lost tax dollars with STAR payments that are made directly to the local school district, which are over and above a school district's traditional state aid payments.

Last year, the State Legislature expanded the STAR program by adding a rebate, which was mailed directly to homeowners last fall. Rebate amounts differed by school district and the type of STAR exemption, Enhanced or Basic, that had been granted to the homeowner.

With the enactment of the 2007-08 state budget, several changes were made to the STAR Rebate program. Under the new Middle Class Rebate program, rebate checks will be issued by the Department of Taxation and Finance and mailed to homeowners beginning in October. The rebates will be in addition to the Basic and Enhanced STAR property tax reductions that appear on one's school tax bills. Once again, STAR Rebate benefits will based on local school district tax rates, which have not been finalized as of this writing. Even so, I can share with you the projected STAR savings for 2007 that are based on countywide averages. These numbers will be fine-tuned as individual school districts finalize their budgets and set school tax rates for the 2007-08 scholastic year. In the meantime, these projections offer a ballpark estimate of the savings homeowners can anticipate later this year. Listed below are the guidelines for the Enhanced and Basic Middle Class STAR rebate program and estimated savings for 2007.

Enhanced STAR

Seniors who have Enhanced STAR will continue to receive their rebate checks automatically. The projected total savings for homeowners with Enhanced STAR are estimated to be as follows in 2007:

County STAR
Rebate
Value of Enhanced STAR
Property Tax Exemption
Total STAR
Savings

Erie

$229

$ 915

$1,144

Niagara

$279

$1,115

$1,394

Basic STAR

Homeowners who receive Basic STAR benefits will be required to make a one-time application for the Middle Class STAR Rebate by November 30, 2007. In subsequent years the rebate will be automatic unless the homeowner moves or there is a change in property title and ownership. The applications are currently being prepared and are expected to be available this August. Homeowners will have the option of filing the required application online (www.tax.state.ny.us) or by mail. Once applications become available, mail-in applications will be available through my district office. Rebates for Basic STAR homeowners will be based on the homeowner's 2005 income, which will be verified against the applicant's 2005 state tax return. For purposes of this rebate, income is defined as the homeowner's federal adjusted gross income less IRA deductions. Projected Basic STAR savings for 2007 are estimated to be as follows:

County Income STAR
Rebate
Value of Basic STAR
Property Tax Exemption
Total STAR
Savings
Erie $ 90,000 or less $316 $525 $841
$ 90,001 - $150,000 $237 $525 $762
$150,001 - $250,000 $158 $525 $683
Niagara $ 90,000 or less $405 $674 $1,079
$ 90,001 - $150,000 $303 $674 $977
$150,001 - $250,000 $202 $674 $876

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