Upstate Editorials Project
Property tax rebates (July 2007)
On July 22, 2007, newspapers across New York State published their first in a series of occasional Upstate Focus editorials.
The issue of concern chosen for that day was the state's plan to give homeowners a property tax rebate check.
Each newspaper published its own opinion, reached independently. Here are the editorials:
Batavia Daily News: Property tax rebates
You could put it aside to help pay next year's school taxes.
You could go out and buy a new TV, the better to escape the reality of New York State taxes (and to do your part to boost the economy).
You could save it for later.
You might need it later. Because the 2007 Middle Class STAR Rebate in this year's budget is a gift the state is buying for you on your credit card. State lawmakers could have helped reduce taxes in future years by paring down some of the state's estimated $50 billion-plus debt load -- the state debt amounted to $2,700 for every man, woman and child, and New Yorkers were paying $4.3 million in debt service in 2006, according to the Citizens Budget Commission. Instead, though, state leaders opted to give property taxpayers the fleeting relief of a rebate.
The amount of your rebate will depend on how much you earn and how much you pay in school property taxes. In Genesee County, those who make less than $90,000 will get a check averaging $361. Those making between $150,000 and $250,000 will receive checks averaging $179.
Those fortunate enough to earn more than $250,000 get nothing.
Averages in Wyoming County: $332 for those with incomes up to $90,000, ranging down to an average of $177 for those in the higher income range.
And in Orleans County: $426 for those with incomes up to $90,000, ranging down to an average of $212 for those in the higher income range.
The biggest rebates in the three-county area will go to Elba Central School District property owners, where they will range from a low of $277 to a high of $582; the smallest rebates will go to Wyoming County residents of the Yorkshire-Pioneer School District, where they will range from a low of $125.24 to a high of $264.
You probably won't be able to use the rebate to help pay this year's school taxes. The information about how to apply won't be going out to Genesee, Wyoming and Orleans counties until Aug. 20.
Figure on a few weeks for the applications to be processed, and then for the checks to go out and -- well, figure on paying this fall's school taxes without 2007 Middle Class STAR help.
The bright side is that by the time the check comes, you'll have had time to find a good use for it. You could invest in textbooks, for example, so that your children won't have to go without if the state budget collapses under its increasing debt load and cuts school aid.
Invest in a snowplow, so you can keep your road plowed even if the state cuts back on its Department of Transportation.
Buy a gun; the state may be forced to hire fewer troopers.
Or go to medical school before the state university system becomes so expensive only the rich need apply. You may need the medical degree, anyway, when the hospitals succumb to inadequate state reimbursements.
So, yes -- there are many good uses for this "gift." Most of all, don't forget to set aside a few bucks to send the governor and your state legislators cards. They wanted to give you a little immediate relief from high taxes. Thank them now while you can still afford it.
Binghamton Press & Sun-Bulletin: Property tax rebate
The check’s not in the mail, but for New York City residents, last week the form to get the check was in the mail. And for homeowners in the Tier, the form will be in the mail the week of Sept. 3.
It’s being called the 2007 Middle Class STAR Rebate Program. Last year lawmakers sent the rebate checks directly to Tier homeowners in the STAR program, thoughtfully, right before the November elections. This year, Governor Spitzer felt they should be tied more directly to income levels. (He actually wanted to put the money into STAR directly. That would save taxpayers who itemize deductions the cost of reporting their rebate checks as income. Those who don’t itemize were spared that extra tax.)
In true New York style, even filing the forms is complicated. Here are the basic rules. If you’re a homeowner and you and your spouse’s combined income is more than $250,000, there’s no rebate for you. If you are seniors with enhanced STAR whose household income is up to $67,850, you don’t have to apply. You will receive a rebate directly. All other homeowners will have to apply by November 30. So this means that New York City residents have four months to file, while those in the last group to receive letters — Long Island’s Suffolk and Nassau counties — have but two.
You expected something logical out of Albany?
There are two options for applying. You can use the form supplied in the letter you will receive telling you that you are eligible, form DTF-179, or you can file directly at the Web site http://www.nystax.gov/star/2007/. Don’t bother skipping ahead to the Web site before Sept. 3, though. Your letter will contain your personal code that must be included on the application.
The forms require your name, Social Security number and you must indicate whether you filed a 2005 New York State Income Tax form. If you were not a resident in 2005, you will have to mail in a copy of your 2005 federal tax form.
This seems like a lot of dancing about, excessive printing/postage costs, and of course, unnecessary stress and confusion that could have been spared by just following Spitzer’s recommendation to start.
Then again, why take the easy, less-expensive route when you’re in the grand and glorious Empire State?
Buffalo News: Refunding your money
Ronald Reagan is said to have had an important reminder placed on his Oval Office desk: "There is no limit to what a man can do or where he can go if he doesn't mind who gets the credit." This is remembered mostly by people who want to make sure Reagan gets lots of credit, for everything from the end of the Cold War to the fact that the sky hasn't fallen.
It is not remembered at all by many New York politicians who have perverted worthwhile efforts toward property tax relief into exercises in shameless self-promotion.
The state of New York has been relatively flush with cash in recent years, coffers fed by its progressive income tax and its sales tax. A use for that money that is both wise and politically popular has been to mitigate the pain of ever-higher property taxes for homeowners around the state, and doing it in a way that eases the individual tax burden without hurting the local school districts that are so dependent on that property tax revenue.
In 1997, the Legislature approved New York's STAR -- School TAx Relief -- program. Homeowners can file paperwork with their local assessors to have $30,000 of their homestead's value knocked off when figuring the property taxes they owe to the local schools. An addendum called Enhanced STAR, to boost the benefits for senior citizens, was added the next year. State funds make the school districts whole. How much you save depends on your local school tax rate but, in a high tax state such as New York, it could be a lot.
Good policy. Lousy politics. Nobody was getting the credit. So, in 2006, Gov. George E. Pataki and the Legislature came up with another STAR benefit, one that people were more likely to notice.
It added to the property tax-lowering formula with a rebate, a check paid directly to qualifying taxpayers, arriving just before the 2006 elections. Members of the Legislature used separate state-funded mailings to point out their own largess, and the check stubs included a notice that the money was thanks to the governor and the Legislature.
A great many checks, reportedly as many as 200,000, were destroyed before being mailed and reissued because the first version didn't make that origin clear. And even then, according to press reports at the time, a lot of taxpayers didn't realize which heaven this manna had fallen from.
This year, there will be another round of STAR rebates. Although altered, at the insistence of new Gov. Eliot L. Spitzer, to focus benefits toward the most-overtaxed middle class, the idea still is to favor homeowners around the state with gifts of a few hundred to a thousand dollars from state coffers -- being bribed with our own money.
Spitzer, to his credit, didn't argue for another round of expensive check-writing. He wanted the extra money -- $1.3 billion this year, $5 billion over three years -- to be rolled into the old STAR approach of lowering property tax assessments. But the Senate and its Republican leader, Sen. Joseph L. Bruno, insisted on the rebate approach -- the kind of thing that politicians can more easily claim credit for.
Not that Spitzer would have been above bragging about tax relief in general and targeting the middle class in particular, if it had come out as he proposed. But the Senate's insistence on issuing rebate checks clearly benefits the politicians more than the taxpayers those politicians are supposed to serve.
Rather than a nice juicy check, creating political gratitude for about as long as it takes to spend the money, New Yorkers would be better off with permanent structural changes to the still-high property taxes that make it hard to sell a home, and harder to keep one.
Elmira Star-Gazette: Rebates an artful dodge around real tax relief
Have you ever gone shopping for a big-ticket item, say a widescreen TV or a washing machine, and seen sales gimmicks such as $50 or $100 mail-in rebates on the items? And have you ever wondered why the manufacturers or stores don’t just knock that money off the price rather than force you to fill out forms, mail in the rebate and waiting four to eight weeks for your money?
That’s how we feel about the rebate tactic that the New York Legislature and, most recently, Gov. Eliot Spitzer have adopted. They take taxpayers’ money and then give some of it back, rather than keep the tax tab low on the front end. The prime target is the property tax in New York, the single greatest factor in ranking state residents as the most heavily taxed by state and local governments in the nation. Rather than make the tough call of controlling government expenses, including education and public health programs, legislators and the governor have given taxpayers back $3.6 billion a year through the STAR program as though it’s a gift. That amount will increase to an estimated $5.1 billion in the current fiscal year. Politically, it’s a clever play, but in reality, no taxpayer should be grateful for having back taxes they never should have paid in the first place.
And that is the very axiom that state legislators and Spitzer ought to be supporting, rather than overcharging New Yorkers and then asking for their political forgiveness by refunding some of their money with checks that have local legislators’ names on them. Are we supposed to be impressed? No. Instead, taxpayers should demand that the state quit playing this take-and-give-back game of rebates.
For one thing, the rebates are discriminatory. They don’t go back to businesses or people who rent their places to live. They only go back to homeowners, so in effect businesses — the very entities we so badly need to protect in New York — subsidize the STAR program as well as the additional property tax relief the Legislature and Spitzer are considering for senior citizens.
“Rebates aren’t nearly the solution,” says Matthew McGuire, communications director for The Business Council of New York State. “They are a redistribution of the tax burden on businesses.”
But the solution is not to expand rebates to include businesses. That would only move the state farther away from what should be a long-term strategy, and that is to keep spending at or below inflation.
“Fiscal Novocain” is the term that E.J. McMahon, director of the Empire Center for New York State Policy, uses to refer to the STAR program and rebates because they dull the pain of property taxes, but don’t cure the cause — uncontrolled government spending.
“They think they’ll get more political value by sending a check to your mail box,” McMahon says, “because they found that people have grown cynical with STAR in its old form. What I’m hearing, and maybe what you’re hearing, is that people are equally cynical about the check in the mailbox. What everybody ultimately says is cut the gimmicks and just reduce the property tax.”
The answer is pretty much the same from other government watchdog groups in New York. Elizabeth Lynam, deputy research director for the Citizens Budget Commission, credits property tax rebates with giving money directly to taxpayers rather than, like STAR, giving money back to school districts, a move that doesn’t ensure districts will hold spending in check. “The current program, the STAR program, may have its place,” Lynam says, “but it’s flawed and has been from the start.”
Even Sen. George H. Winner Jr., R-Elmira, who profits politically from STAR and rebates, acknowledges in a statement to the Star-Gazette, “There is no question that cutting government spending is the most effective tax cut.” But he sees the rebate program as a way to provide the tax relief that local governments won’t on their own.
And therein lies the fundamental problem in New York of an end-run around the above-inflation spending that keeps the state in the shameful No. 1 rank of state and local taxes. State lawmakers and the governor must have the courage to make tough budget decisions about state spending and also force localities to do the same.
The rebates have become an annual bailout, a crutch to let government off the hook. New York legislators need to look at alternatives such as the The New York State Property Taxpayers Protection Act proposed in the state Assembly. The bill would:
-- Cap annual school-district tax growth at no more than 4 percent, unless overridden by a local public vote.
-- Restrict the costs of state mandates passed on to local governments.
-- Lift Medicaid expenses off counties’ backs.
Introduced in the last month of the session, this bill should be seriously considered in 2008. Legislators may think they can ignore the real problem by lulling residents with political tranquilizers such as rebates. The trouble is lawmakers are not just fooling taxpayers, they also are fooling themselves. Real tax relief cannot come in an envelope every fall. It must start in Albany with strict spending restrictions. There’s no other way for New York to shed its dubious distinction of being No. 1 for taxes.
Glens Falls Post-Star: Don't be tricked by tax rebates
We're going to talk you through a little magic trick that the politicians like to show off at parties and during helicopter rides to campaign rallies in New York City.
We'll need a volunteer from the audience.
Take the money for your state tax bill and put it in your pocket. Now stick out your hand and accept an envelope being offered by the governor and the state Legislature.
Abracadabra! Allakhazam! Ally McBeal!
Now reach into your pocket.
It's empty! What happened? Where did my money go?
Now open the envelope.
It's a property tax rebate check through the state's 10-year-old STAR program. It's not all the money that was in your pocket. But considering how much money got taken out of your pocket during the first part of the trick, this is a stroke of luck.
Your tax money was in your pocket. Then it disappeared. Then you got some of it back. Isn't that amazing folks?
The state politicians drive up your taxes by spending too much and pushing unreasonable mandates that drive up local property taxes. Then they make you feel grateful to them by sending you a rebate check.
That's quite a little magic trick. And taxpayers shouldn't fall for it.
In 2006, then-Gov. George Pataki and the state Legislature sent out $700 million in rebate checks, which were timed to arrive just before the November elections, according to The Buffalo News. The rebates, on top of the regular STAR tax reduction, seemingly came out of the blue -- like magic.
This year, the state will "rebate" a total of $5 billion through STAR, the Buffalo News reported. Where is the money coming from? Income, sales and business taxes -- taxes that have already been paid by us.
The dirty secret behind this sleight of hand is that the rebate checks are a smokescreen for the real spending and mandate reform that lawmakers aren't getting done.
A report from A.T. Kearney Inc. released last week concluded that New York's economy "has staggered for over three decades," predominantly upstate. The state's job growth has fallen far behind the rest of the country, high-wage jobs are disappearing and people are moving out of the state in staggering numbers (a net loss of 225,000 residents between July 2005 and July 2006). And The Public Policy Institute in May reported that New York had the highest per capita state and local tax burden in the country in 2005, the last year for which figures were available. Last year's state budget, almost $121 billion, was the biggest in history.
But instead of fixing the problems that have created this situation, our state representatives splash around in a perceived tax windfall, then go around re-gifting that taxpayer money as a way to curry favor with voters.
The headline splashed across the press release from the state Senate on Monday boasted about how the Senate had "turned up the pressure for property tax relief," saying the Senate bill would "provide" seniors with $200 million in relief and that property tax rebates for homeowners would "triple in 2008; quadruple in 2009." Gov. Eliot Spitzer's office similarly touted the rebates as a "critical component" of the state's ongoing efforts to reduce the tax burden of "New York's seniors and hard-working families." To make matters worse, many homeowners this year will have to apply for their rebate check. (Look for a letter in the mail soon, and don't throw it out.) That flaw is being fixed for next year, when homeowners will get their rebates automatically. The Senate is already taking credit for fixing that "chaotic disaster."
What New Yorkers need more than some ballyhooed tax rebate is a fundamental change in state government operations that reduces state spending, releases local governments and school districts from oppressive mandates, and makes it less costly for businesses to survive and thrive here. That's what lawmakers should be spending their time on, not conjuring up some scheme for making it look like they're doing something substantive to fix the state's problems.
It's nice that residents are getting some of their tax money back.
But they shouldn't lose sight of who's responsible for them paying so much in the first place.
Rochester Democrat & Chronicle: Rebates don't work
Tax rebates are feel-good public policy, politicians’ favorite kind. But for the relatively little that rebates provide taxpayers – rising costs eat them up quickly – they have a bigger, and uniformly negative, impact on local and state spending.
In other words, government delivers its check with one hand and slips out your wallet with the other. This is not what upstate New York needs. If government wants to help, it should pair rebates with lasting spending controls.
The state missed its chance this year to combine $1.3 billion in tax rebates and $1.8 billion in new school aid with caps on local school taxes. If there’s a state rebate bill next year — Senate Majority Leader Joe Bruno has one in mind — then verifiable spending controls should be adopted, too.
Rebates are purely a political animal. Politicians like to deal with taxpayer angst not by reforming the system but by sending a cashable sympathy card — the rebate this year will average more than $300 in Monroe County. Consider the politicians who most favor rebates. That would be Bruno and his tenuous Republican majority in the Senate. He likes a $6 million rebate program, not an income-based one, as is the case this year. Why? Because property-tax rebates send more to Republican suburbs.
Rebates rob Peter to pay Pauline. And the taxpayer is both Peter and Pauline. The rebates and the state aid package this year helped to raise state spending by 9 percent, to a record $121 billion. Tax receipts, especially from Wall Street, help in the short run. But if those falter, the taxpayer is on the hook for the spending.
Rebates spur a rise in local school taxes. Local school levies have risen at roughly triple the rate of inflation over the past 10 years. Studies out of the Maxwell School in Public Administration at Syracuse University have found that the introduction of the State Tax Relief program (STAR) coincided with a 28-percent increase in per-pupil spending. Rebates are going back to the schools in form of higher taxes.
Rebates attack the right problem — high taxes. But without spending controls, it’s just another bit of Albany fakery dressed up as good policy.
Schenectady Daily Gazette: Tax rebates don’t touch the basic problem
Question: When is a tax cut not a tax cut?
Answer: When it is a tax rebate.
That’s how New York state has decided to ease the onerous burden of local property taxes, and no homeowner in his right mind is going to turn down a check of $384, the average rebate this year. But don’t be fooled. Those rebates, and the entire STAR program they are a part of (average savings $1,024 this year), may be politically popular, but they are bad tax policy.
The original STAR (School Tax Relief) at least looked like a tax cut in that it provided a homestead exemption and was intended to be permanent.
Unfortunately, it never fulfilled its promise because it lacked the cap on the annual growth in school tax levies (4 percent or the rate of inflation) that Gov. Pataki had included in his 1997 proposal. The result was that taxpayers didn’t get the relief they should have, as school districts just used the STAR savings to hold down the size of their own tax increases and make it easier to pass big budgets. School taxes have continued to climb despite STAR and despite record increases in state aid to education in the last two years.
But STAR wasn’t really a tax cut, just a shift of the tax burden. The state in the coming year will spend $4.7 billion subsidizing local school taxes ($6 billion by 2009-10), and this money will also come from us taxpayers, primarily through the income tax. One can argue that the income tax is more progressive than the property tax, which hits people on fixed incomes especially hard. The same could be said for this year’s rebate, which is means-tested and targeted at the middle class. But the state must make up the money by either raising taxes or cutting spending. How likely is the latter to happen?
And if the original STAR wasn’t really a tax cut, the rebate is even less of one. It’s more like a bonus given to you by your boss — in this case, your friendly legislator and governor, who will both claim credit for it. Easily given, but also easily taken away.
The state should stop the games and legerdemain. If it is serious about holding down school taxes, it would put a cap on annual increases in them, as Massachusetts did more than 20 years with Proposition 2 1/2 and New Jersey did this year. Exceptions can be made for such things as increased enrollment, size of the property tax base, and extraordinary circumstances. The state would also guarantee a steady and sufficient flow of aid to those subject to the cap. Especially now, with Gov. Spitzer having changed the state aid formula to drive more aid to needier districts and committed to more large increases over the next three
Syracuse Post-Standard: Giving it back
Thirsty? Here’s one way to get a glass of water:
First, take a glass and fill it with water. But don’t drink it. Instead, pour the water into a rain barrel. Then go about your business for the rest of the day. Just before bed, if you have permission, you may get your glass, dip it into the rain barrel — that is, if all the water hasn’t evaporated yet. Then drink up, and be thankful.
Tax relief in New York state works a bit like that convoluted method of "thirst relief." Take, for example, the $1.3 billion rebate program approved by the Legislature and signed by the governor this year. Here’s how it works: First, you work hard to fill your "cup." Then you pour your hard-earned tax dollars into the barrel of federal, state and local government — a bigger barrel than that of most states, by the way. Then you wait.
If, as happened this year, your tax money doesn’t evaporate and state leaders elect to let you have some of the leftover dollars you already sent them, you will get an envelope in the mail. No, not a rebate check. Not yet. Instead, it’s a form you must fill out and send in, telling about your property and your income. Once you qualify, and if you’re very patient, you may indeed get a rebate check, eventually. Drink deep and be thankful.
The state simply could have added that barrel-full of rebate money to the existing STAR property tax relief reservoir. That’s what Gov. Eliot Spitzer originally proposed. State lawmakers also could have decided to lower overall tax rates, committing themselves for the long term to limiting the size and growth rates of government bureaucracies, and helping to lift the onerous burden of taxes on all New Yorkers. That’s something most politicians declare they favor, but never get around to doing.
Albany did neither of these things this year. Instead, lawmakers chose one-time rebate checks — which, incidentaly, will include the names of your legislators who so benevolently are returning some of your money to you. They also agreed to a "means test" that scales back the rebate for taxpayers earning more than $90,000 per year, eliminating it altogether for those earning $250,000 or more.
This "progressive" structuring should benefit middle-income taxpayers. But some eligible taxpayers will miss out by not sending in the mandatory form. It also means more bureaucracy, which carries a cost (last year the state spent up to $3 million on the rebate process), and a longer delay in mailing out the checks.
Your check may not even reach your mailbox by Election Day. But no matter: State lawmakers aren’t on the ballot until next fall — probably right after you receive your next rebate check, courtesy of You-Know-Who.
Watertown Daily Times: Property tax rebate
A property tax rebate plan aimed at New York’s middle-class homeowners discriminates against other taxpayers, including property owners, who will foot the bill without receiving the benefit of the tax break. In addition, the plan adopted this year by Gov. Eliot L. Spitzer and the state Legislature to return $1.3 billion in property tax relief to homeowners will require a cumbersome application process for millions of homeowners who might qualify for the rebate check.
That is because this year’s rebate plan is income driven, rather than the broad-based relief which was mailed out automatically to all property owners who qualified for reductions in their assessments for school property taxes under the School Tax Relief (STAR) program.
Eligibility this year will be determined on a sliding income scale. Taxpayers making less than $90,000 upstate and $120,000 downstate receive the greatest benefits which will gradually disappear for those who earned more than $250,000 in 2005.
In general, eligible Jefferson County residents can expect a $242 tax rebate check, while a typical Lewis County taxpayer will receive $271. Eligible St. Lawrence County taxpayers will get $365. But before they do, most taxpayers will have to fill out an application for the money. Although senior citizens receiving an enhanced STAR exemption will receive their rebate automatically, the checks won’t be in the mail as quickly for other property owners. They will have to await directions from the state Department of Taxation and Finance explaining how to apply for their rebate so the agency can verify ownership and income to determine eligibility in a time-consuming process, all of which will be done at more cost to taxpayers.
State officials have complicated what was a simple and straightforward rebate plan.
But it has other drawbacks. Some of the largest taxpayers — businesses and industries — won’t receive any benefits. They are not eligible for the tax break. And neither are income-tax paying tenants whose rents also underwrite property taxes.
If the state wants to provide tax relief, the better way is to not collect the taxes in the first place.
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