2010-2011 Executive Budget – Briefing Book


STAR

I. Overview

The STAR program consists of three separate initiatives designed to provide local property tax relief:

II. History/Context

STAR was enacted in 1997 to offset rising property taxes for homeowners and to provide additional targeted property tax relief to senior citizens. Over time, the scope of the program was expanded by raising the Enhanced STAR income eligibility threshold, and by increasing the size of the Enhanced STAR exemption.

These enhancements have contributed to increases in the current and projected cost of the STAR program. STAR spending totaled $3.1 billion in 2009-10, a 25 percent increase from 2001-02 when the STAR phase-in was completed. Despite this program’s intent and cost, local property taxes have continued to increase. Outside of New York City, school property taxes grew by an average of seven percent per year from 2001-02 to 2008-09. This rate of school property tax growth was twice the rate of inflation and twice the average growth in wages. As a result of the economic downturn, school districts outside the Big Five cities proposed budgets with average property tax increases of two percent for 2009-10. In spite of this, New York’s local property taxes remain among the highest in the nation.

III. Proposed 2010-11 Budget Actions

After the recommended savings actions described below, the school tax relief program would total $3.18 billion in 2010-11, a $47 million increase from 2009-10.

IV. Summary of Spending (All Funds)

Category 2009-10
($ in millions)
2010-11
($ in millions)
Change
Dollar
(in millions)
Percent
STAR Spending (commitment) 3,132 3,179 47 1.5

 

Category 2009-10
(millions)
2010-11
(millions)
Change
Dollar
(in millions)
Percent
Basic STAR 1,787 1,857 70 3.9
Enhanced STAR 716 775 59 8.1
NYC PIT STAR 629 547 (82) (12.9)

V. Major Initiatives

Gap Closing Actions

Proposal 2010-11
($ in millions)
2011-12
($ in millions)
Restructure NYC PIT STAR Benefit 143 180
Increase the Maximum Annual Reduction for STAR Exemptions 40 40
Eliminate STAR Exemption Benefit for Homes Valued at $1.5 million and Above 30 30
Total 213 250

 

 

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