ALBANY – Some homeowners waiting for their full rebate checks through a new tax-rebate program will have to wait a little longer.
The state tax department indicated Tuesday it has identified those who received inaccurate checks through a change to the state's STAR program and is sending out the difference.
But the state still won’t say how many people were affected.
The problem appears to impact senior citizens who recently bought homes and are enrolled in the Enhanced STAR program, which provides a larger break on school taxes for people who are income eligible.
Instead of getting the Enhanced STAR rebate, they received the Basic STAR rebate, the tax department said in a memo to town assessors on Tuesday.
Enhanced STAR, which is for homeowners 65 and older whose household income is $86,000 or less, provides a rebate that's typically about twice as large as basic STAR.
"Thank you to all of you who we were in touch with last week," the memo, obtained by the Albany Bureau for the USA Today Network, said.
"We’ve sent letters and made phone calls to property owners who received a Basic STAR credit but who were eligible for Enhanced STAR. We expect to mail them checks for the difference this week."
The state estimates the average basic STAR credit this year is $750, while the Enhanced STAR is about $1,400 for eligible seniors.
So that's left some homeowners short when they had to pay the school tax bill last month.
For most homeowners, school-tax bills are due each year by Sept. 30.
Some homeowners have expressed frustration with the state's mistake, with some saying they have been unable to pay their taxes without the full state reimbursement, town assessors said.
"A lot of them have been waiting for this check because they don’t have the additional money to pay their school taxes. They are very upset," said Lori Frongetta, the Riga assessor who heads the Monroe County assessors' association.
"They now have to wait until who knows when for the next check to arrive, which means they are going to be late on their school tax payments. It’s just not fair."
There was no immediate comment Tuesday from the state Department of Taxation and Finance on when all the checks will go out or how many people were affected.
The situation developed because Gov. Andrew Cuomo and the state Legislature agreed in March to change the way the STAR rebate program works for new homeowners.
The STAR program, started in 1997 as a way to lessen the burden of New York's high property taxes, had given all homeowners an upfront savings on school tax bills.
For homeowners who didn't move, the STAR program isn't changing and will be an upfront exemption.
But the checks are coming from the tax department for people who bought homes after Aug. 1, 2015, or who didn't first apply for STAR since May 1, 2014.
The homeowners also had to apply to the state for the check by July 1 to get it by the end of September, although the state hasn't said whether all those checks were issued by the deadline.
Households with taxable income under $500,000 can get basic STAR, which exempts the first $30,000 of the full value of a person's primary home from school taxes.
Enhanced STAR is a larger rebate because the first $65,300 of a home's value is exempt from school taxes.
Waiting for checks
The shift in policy is aimed at saving the state $96 million a year, but state officials contend the money is being used for a decrease in personal income taxes, saying it has no net gain to the state's coffers.
Nonetheless, the change will ultimately mean an end to the upfront savings when houses are sold.
That's not a problem, so long as people get the checks in time to pay their taxes, said William Beckmann, the assessor in Stony Point, Rockland County.
"As long as you get the check, it’s a wash," Beckmann said.
Assemblyman Mickey Kearns says the priority is to get seniors the rest of their rebates, but he's also proposing changing the legislation back to how it was in 1997 when people were exempt on the front end.
"So if we went back to the old way, which I think everyone liked, is they just take it right off the front right off the bat and then you're not waiting for a check. So almost this reimbursement program, I just think it causes confusion and many of the legislators did not like this proposal. Unfortunately, it did pass in the budget," says Kearns.