New York State Executive Chamber | Governor Eliot Spitzer

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FOR IMMEDIATE RELEASE:
January 31, 2007

EXPANDED PROPERTY TAX RELIEF TARGETS MIDDLE INCOME HOMEOWNERS

Governor Eliot Spitzer today proposed a three-year, $6 billion expanded property tax relief plan that drives most of its benefits to middle income homeowners.

“Real property taxes in New York State have risen 60 percent in the last decade and are among the highest in the nation,” Spitzer said. “There’ll be no turnaround in New York until we reduce this crushing burden.”

“My budget proposal tackles this problem head on with relief targeted at middle income families who need it most.”

The Executive Budget Proposal for fiscal year 2007-08 provides $1.5 billion in property tax relief by increasing the current STAR program with an additional benefit for middle-class taxpayers based on income, and increased benefits for seniors. STAR would increase by $2 billion in 2008-09 and $2.5 billion in 2009-10 for a three-year cumulative increase of $6 billion.

The centerpiece of the plan is the creation of a new Middle Class STAR program that will provide benefits to taxpayers on a sliding scale based on income, with benefits declining as income exceeds $60,000 for upstate homeowners and $80,000 for homeowners in the higher cost New York City metropolitan region. The percentage benefit added on a sliding scale basis will increase over the next three years and the income ranges to which the scale applies will be adjusted to reflect income growth during the period.

Upstate residents with incomes of $60,000 or less will receive an 80 percent additional benefit in 2007-08, a 90 percent additional benefit in 2008-09 and a 100 percent additional benefit in 2009-10. In other words, by 2009-10 the value of the STAR benefit will be double the basic STAR benefit received in 2006-07. 

More than 95 percent of all homeowners across New York State will receive additional tax relief under the Governor’s Middle Class STAR program, with 60 percent of homeowners qualifying for the maximum benefit. Upstate, 89% of the increased benefit will go to 1.17 million homeowners with incomes of $120,000; downstate, 85% of the increased benefit will go to 1.13 million homeowners with incomes of $160,000 or less.

The average Basic STAR savings upstate was $640 in 2006-07. As a result of the Governor’s Middle Class STAR program, for a family with income of $60,000 or less, this benefit would grow to $1,152 in 2007-08, $1,220 in 2008-09 and $1,280 in 2009-10. 


In the downstate counties outside of New York City, where property values and taxes are considerably higher, the average basic STAR savings was $1,150 in 2006-07. For a family with income of $80,000 or less, as a result of the Middle Class STAR program, this benefit would increase to $2,070 in 2007-08, $2,190 in 2008-09 and $2,300 in 2009-10. 

In New York City, STAR relief will be increased for all residents paying personal income tax with income of $235,000 or less. Married individuals filing joint returns will be eligible for a refundable credit of $300, up from $230 last year. All others will be eligible for a credit of $150, up from $115 last year.

The proposal will make permanent the cost of living adjustment for the Senior STAR.

The Executive Budget also proposes a broader strategy for tax relief by addressing some of the underlying causes of high property taxes, including continuation of the local Medicaid cap and takeover of the Family Health Plus program to save counties and New York City $1.96 billion in 2007-08, generous increases in school aid tied to accountability, additional support for distressed municipalities conditioned on implementation of improved financial practices, consolidation incentives and mandate relief.