Posted september 7, 2011
Understanding the New 2% Cap on STAR Property Tax Savings Increases
Where did the new STAR cap come from?
A new 2% cap on the increase in homeowners’ STAR savings was imposed by the NY State Legislature this spring as part of the 2011-12 state budget. NY legislators have been reducing the value of STAR exemptions each year for a number of years in their efforts to cut the state budget. In 2011 they did something a bit different; they created an annual 2% cap on increases in homeowners’ STAR savings.
In other words, because the state has been facing huge budget deficits, the Legislature has been working to gradually shift the portion of homeowners’ school tax bills that in recent years has been paid by the state through STAR away from the state and back onto homeowners.
How does this cap impact South Colonie tax bills?
The new STAR savings cap means that, starting with September 2011 school tax bills, a homeowner’s STAR savings can only be 2% higher than it was the previous year, even if other factors in the tax calculation formula would otherwise have created a greater savings. It means that your tax bill got a little higher, and the math on your tax bill got a lot more complicated to explain.
South Colonie contains parts of three towns, and most homeowners qualify for either a Basic or an Enhanced STAR tax exemption on their primary residence. Below is the amount of increased STAR savings that is above the 2% cap and that, therefore, most homeowners will not receive in 2011:
Basic STAR Enhanced STAR
Colonie $30.74 $62.21
Guilderland $53.37 $107.67
Niskayuna $6.63 $12.92
Please note that the amount of school tax you are exempted from paying through STAR did grow this year compared to last year. It just did not grow more than 2%.
Did the STAR savings cap impact all South Colonie tax bills by these amounts?
No. These amounts are true for most South Colonie school tax bills, but not all. The impact of the STAR cap on your property tax bill will be different if:
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The property in question is not your primary residence, or you never applied for STAR on it
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You also receive a disability and/or other property tax exemption (which are calculated first, before STAR exemptions)
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You received a Basic STAR exemption last year but an Enhanced STAR exemption this year, or vice versa
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The property in question is a co-op or manufactured housing pad, or the parcel’s assessed value is less than the STAR exemption amount
What role does the school district play in STAR exemptions?
School districts play NO role in STAR exemptions, nor in determining how much of the overall tax burden must be paid by any one property owner or the residents of any one town.
It’s important to understand that the Board of Education only decides one number: the tax levy, which is the total number of tax dollars needed to balance the school budget approved by the voters in May.
The other factors that impact an individual property owner’s school tax bill are decided by:
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the state Legislature (which may change STAR exemptions)
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your town assessor (who assesses properties)
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and the NY State Office of Real Property Tax Services (ORPTS, which sets town equalization rates and calculates STAR exemption impacts)
For more information, go to the ORPTS website by clicking here, and click on “STAR” on the left-hand navigation bar.