Establishes city and county property tax relief exemptions

Summary of specific provisions

Section 1. Amends the real property tax law to create two new sections: 425-b, which deals with CitySTAR, and 425-C, which deals with CountySTAR

§425-b. City state-supported tax relief (CitySTAR exemption) 1. provides an exemption against real property taxes imposed by a city for residents of a city with a population of less than one million who also receive the School STAR real property tax exemption for city tax years commencing on or after January 1, 2010. Eligibility determined as follows:

a. states how population is calculated

b. provides requirement for city legislative body to approve a resolution to provide such exemptions.

c. (1) provides that the city cannot increase total city expenditures by the lesser of 120% of inflation or four percent; and (2) Defines total city expenditures, exempting the following expenditures from calculation in that total: expenditures from tax certiorari; expenditures from court orders or judgments against a city; emergency expenditures, certified by the state comptroller; capital expenditures; expenditures from projected increases in construction costs; non-recurring expenditures; expenditures incurred due to service consolidations or mergers.

d. requires the legislative body to state the projected increase or decrease in total city expenditures, and why expenditures would be excluded from that calculation.

e. bars the legislative body of a city from amending its final budget if such an increase raises spending to exceed the caps described above, unless such spending is the result of: unforeseen increases in construction spending (if projects come in under budget, excess would be used for tax reduction); or, increased spending is the result of gifts or grants in aid not in the original budget.

2. Provides that the CitySTAR will be equal to the school STAR exemption for the 2011-2012 school year.

3. Provides for the notification of the state comptroller by the city of tax revenue lost by the city as a result of providing such exemptions within seven days of budget adoption, the validation of such data by the state comptroller within thirty days of receipt of such statement, and the provision of such funds to the city within thirty days following validation.

4. Provides that the state will appropriate an amount equal to 45.5 % of the total amount expended on the CitySTAR program to any city with a population of more than one million, to be used for real property or income tax reduction.

5. Defines terms used in the section.

6. Requires the state to appropriate all funds necessary to implement this section, and any funds necessary to pay for any and all state mandates, adopted after January 1, 2009, imposed by the state on localities.

7. Provides that a city that does not increase the rate of its property or sales tax, or the rate of any other tax, will be exempt from the caps described in 1 (c), above. § 425-c. County state-supported tax relief (CountySTAR exemption) 1. Provides an exemption against real property taxes imposed by a county for residents who also receive the School STAR real property tax exemption and do NOT receive benefits from the CitysTAR program city tax years commencing on or after January 1, 2010. Eligibility determined as follows:

a. provides requirement for county legislative body to approve a resolution to provide such exemptions

b. (1) provides that the county cannot increase total county expenditures by the lesser of 120% of inflation or four percent; and (2) defines total county expenditures, exempting the following expenditures from calculation in that total: expenditures from tax certiorari; expenditures from court orders or judgments against a county; emergency expenditures, certified by the state comptroller; capital expenditures; expenditures from projected increases in construction costs; non-recurring expenditures; or, expenditures incurred due to service consolidations or mergers.

c. requires the legislative body to state the projected increase or decrease in total county expenditures, and why expenditures would be excluded from that calculation.

d. bars the legislative body of a city from amending its final budget if such an increase raises spending to exceed the caps described above, unless such spending is the result of: unforeseen increases in

construction spending (if projects come in under budget, excess would be used for tax reduction)i or, increased spending is the result of gifts or grants in aid not in the original budget.

2. Provides that the CountySTAR exemption will be equal to two-thirds of the school STAR exemption for the 2011-2012 school year.

3. Provides for the notification of the state comptroller by the county of tax revenue lost by the county as a result of providing such exemptions within seven days of budget adoption, the validation of such data by the state comptroller within thirty days of receipt of such statement, and the provision of such funds to the city within thirty days following validation.

4. Defines terms used in the section

5. Requires the state to appropriate all funds necessary to implement this section, and any funds necessary to pay for any and all state mandates, adopted after January 1, 2009, imposed by the state on localities.

6. Provides that a county that does not increase the rate of its property or sales tax, or the rate of any other tax, will be exempt from the caps described in 1 (c), above.

Justification

CitYSTAR; The parts of New York State which face the greatest, and most chronic, economic and social problems are the 61 cities outside of New York City. CitYSTAR boldly addresses these challenges by providing tax relief to existing homeowners, and incentives for potential homeowners to invest -- personally, and financially -- in cities. Helping cities strengthens the economies of entire regions. Allowing cities to flounder will result, ultimately, in the decay of our state's whole economy. The residents of counties who do not reside in cities also need relief from some of the highest property taxes in the nation. Providing an exemption equal to two-thirds of the school STAR exemption will help reduce the cost of municipal government to county property taxpayers.

Prior legislative history

2008: A.5383; Held for consideration in Real Property Taxation 2007: A.5383; Referred to Real Property Taxation 2006: A.3529; Held for consideration in Real Property Taxation 2005: A.3529; Referred to Real Property Taxation 2004: A.1986-A; Held in Real Property Taxation 2004: A.1986; Amended and recommitted to Real Property Taxation 2003: A.1986; Referred to Real Property Taxation 2002: A.3475; Held for consideration in Real Property Taxation 2001: A.3475; Referred to Real Property Taxation 2000: A.5623; Held for consideration in Real Property Taxation

1999: A.5623; Referred to Real Property Taxation 1998: A.10005-A; Referred to Real Property Taxation 1998: A.10005; Amended and recommitted to Real Property Taxation

Fiscal implication

CitYSTAR: $323 million ($220 million for cities outside of New York, $100 million for New York City, $3 million for assessor aid). CountYSTAR: $438 million ($420 million for counties and $18 million for assessor aid) TOTAL: $761 million.

Effective date

First of January next succeeding the date on which it shall become a law.