SUBJECT:

PURPOSE:

Real property taxes in New York State have risen 60 percent in the last decade and are currently among the highest in the nation - some 28% above the national average. Nine of the ten United States counties with the highest property taxes relative to home values are located in upstate New York. This property tax burden falls most heavily on middle class New Yorkers whose property taxes are rising too fast for their incomes.

In 1997, the School Tax Relief (STAR) program was enacted to address New York's high property tax burden. The original STAR program provides the same level of tax relief to all New Yorkers, other than seniors, regardless of income.

In 2006, a property tax rebate was created to supplement the original STAR program. The goal of the rebate was to provide additional property tax relief. However, the rebate did not target relief by income which received some criticism by advocacy groups. This year a new program was enacted, referred to as the Middle Class STAR rebate, which provides property tax relief benefits based on a sliding scale relative to the homeowners' income.

This public hearing is also a forum by which to address the sustainability of the Middle Class STAR rebate and to hear proposals on how to enhance the program and/or discuss alternatives such as a real property tax circuit breaker.

Persons wishing to present pertinent testimony to the Committee at the above hearing should complete and return the enclosed reply form as soon as possible. It is important that the reply form be fully completed and returned so that persons may be notified in the event of emergency postponement or cancellation.

Oral testimony will be limited to ten minutes duration. In preparing the order of witnesses, the Committee will attempt to accommodate individual requests to speak at particular times in view of special circumstances. These requests should be made on the attached reply form or communicated to Committee staff as early as possible. In the absence of a request, witnesses will be scheduled in the order in which reply forms are postmarked.

Ten copies of any prepared testimony should be submitted at the hearing registration desk. The Committee would appreciate advance receipt of prepared statements.

In order to further publicize these hearings, please inform interested parties and organizations of the Committee's interest in hearing testimony from all sources.

In order to meet the needs of those who may have a disability, the Assembly, in accordance with its policy of non-discrimination on the basis of disability, as well as the 1990 Americans with Disabilities Act (ADA), has made its facilities and services available to all individuals with disabilities. For individuals with disabilities, accommodations will be provided, upon reasonable request, to afford such individuals access and admission to Assembly facilities and activities.

SELECTED ISSUES TO WHICH WITNESSES MAY DIRECT THEIR TESTIMONY:

1. What was the overall cost to administer the Middle Class STAR real property tax rebate program?

2. Are there legislative and/or administrative changes that should be implemented to make the Middle Class STAR rebate process more efficient?

3. What affect does the STAR rebate program have on local school budgets?

4. Is the STAR rebate program counter-productive to the call for consolidation?

5. Is the Middle Class STAR rebate a sustainable form of real property tax relief and should it be continued? Why or why not?

6. Is the Middle Class STAR real property tax rebate program providing measurable relief to middle and low income property owners or does it disproportionately provide greater property tax relief to high income earners and wealthier geographic areas?

7. What problems were encountered during the process of administering the Middle Class STAR rebates and have they been resolved?

8. There are several proposals to modify the real property tax circuit breaker which would enhance eligibility requirements as well as increase the allowable credit. Would a real property tax circuit breaker be a more efficient means of providing real property tax relief? What recommendations would you propose to the real property tax circuit breaker to ensure that it provides property tax relief to middle and lower income property owners?

9. What measures are being done - if any - to ensure that taxpayers are aware of potential income tax liabilities in instances where the STAR rebate exceeds the school tax?

PUBLIC HEARING REPLY FORM

Persons wishing to present testimony at the public hearing on Real Property Taxation are requested to complete this reply form by November 30, 2007 and mail it to:

Karen Smeaton
Analyst
Real Property Taxation Committee
Floor 23 - Alfred E. Smith Office Building
80 South Swan Street
Albany, New York 12248
Phone: (518) 455-4311
Fax: (518) 455-7095

I will address my remarks to the following subjects:

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