WPCNR SCHOOL DAYS. By John F. Bailey. May 18, 2008: Property Owners of the “hypothetical $500,000 home in White Plains” face a $186 increase in their School Tax resulting from the state Legislature double-cuts in the STAR Basic and Enhanced Exemptions. Seniors over 65 owning such a home will face a $362 increase – as a result of STAR cuts not officially disclosed to the public but noticed on the New York State Office of Real Property Services website. On today’s budget vote in White Plains, the Budget Notice raises questions on why the effects of the STAR Cuts have not been explained to the taxpayers. In the Official School Budget Notice received by some White Plains Citizens this week, (still not received at WPCNR staffers’ residences as of Saturday’s mail), the year-to-year school budget comparison required by law appears to understate the actual tax increase property owners face for the $500,000 home. The mandated district mailing fails to show the higher tax increase White Plains taxpayers will be paying when the lowered Basic and Enhanced STAR exemptions are taken into account. It also fails to show the resulting decline in STAR Savings Polling Places in White Plains for today’s School Budget Vote. Polls are open from 12 noon to 9 PM today, Tuesday.
For the senior citizen property owner over 65 the impact is almost double. If you remember, the legislature slashed their ENHANCED exemption from $7,220 to $6,500. As a result those seniors will pay $455 more in taxes compared to this year – not $390 more as the “Budget Notice” states.
The concealed increased tax caused by the legislature cut in the BASIC STAR (from $3,700 to $3,330 you deduct from the assessed value of your property) is $185.
Because the legislature cut the BASIC and ENHANCED STAR Exemptions 10% for fiscal 2008-2009, up from this year’s usual 5% cut, this increases the tax on White Plains BASIC STAR owners under-65 of a $500,000 home an additional $185 because you are deducting $370 less.
$500,000 Home Assessed at $10,500 Differentials
For BASIC STAR EXEMPTION
2008-2009 School Tax: $3,606
2007-2008 School Tax: $3,227
2008-2009 School Tax with former STAR Exemption: $3421
Tax Increase: $379
Amount Traced to STAR Cut: $185 ($3606 minus $3, 421)
The White Plains Assessor’s Office assesses a $500,000 home as having assessed value of $10,500. The BASIC STAR exemption of $3,330 is deducted from that assessed value, leaving the assessable value at $7,170. That figure is divided by $1,000 and the resulting multiplier, 7.17 is multiplied against the tax rate of $503.01 to compute the tax. The Legislature cutting the BASIC STAR Exemption had the effect of raising taxes not lowering them.
Seniors Over 65 Property Tax Double and Up.
For White Plains Seniors Over 65, the impact DOUBLES. The Senior 65-and-upper owner of a $500,000 home will pay $2,012 in taxes instead of $1,650 they would have paid had the Enhanced STAR not declined from $7,220 in 07-08 to $6,500 for 08-09—courtesy of the State Legislature April 14 surprise. This year the over-65 senior owner of a $500,000 pays $2,012 in property taxes.
$500,000 Home Assessed at $10,500 Differentials
For ENHANCED STAR EXEMPTION FOR SENIORS OVER 65
2008-2009 School Tax: $2,O12
2007-2008 School Tax (HIGHER Exemption): $1,557
Tax Increase: $455
2008-2009 School Tax with former STAR Exemption: $1,650
Tax Increase Amount Traced to STAR Cut: $362
($2,012 minus $1,650)
A $500,000 home assesses to $10,500 of assessed value, and the new Enhanced Exemption of $6,500 reduces that to $4,000 of assessed value in 2008-2009, significantly $720 less than the 2007-2008 rate of $7,220. The senior Over 65-er is double-whacked, they will pay a higher tax rate, $503.01 per $1,000 of assessed value, and thanks to the state legislature, have a higher assessed value of $4000, as opposed to $3,280 this year($720 higher).
No Full Disclosure.
The School District has demonstrated a pattern of reluctance to reveal the automatic increase in taxes to White Plains residents caused by the State legislature lowering BASIC and ENHANCED STAR exemptions 10% . The cuts were enacted the very day the district passed its 2008-2009 Budget.
Instead the district has preferred to concentrate on how the State Aid increase lowered taxes. In actuality the State Aid did not lower school taxes for Mr. and Mrs. and Ms. White Plains, it increased them $186 for the BASIC STAR taxpayer and $362 for the ENHANCED STAR taxpayer.
The Budget Notice – the final communication from the District (one of two written notices), fails to make this clandestine cut clear so seniors, particularly might adjust their tax planning. To be fair, the About Our Schools publication had to prepared before the Legislature’s final decision to slash the STAR Exemptions was made in sessions representatives apparently did not know about.
The District has had ample opportunity to warn its taxpayers.
The district was warned of this secret cut of the state legislature, by the City Assessor the day after the $184.4 school budget was passed April 14.
The School Budget Notice prepared after the passing of the budget and mailed last week, three weeks after the legislature decision, continues to ignore the STAR Cuts raising residents taxes by approximately $93 and $181 respectively for under 65s and over 65 property owners. The cut in the exemptions increases the assessed value of your home making you pay more property tax.
When that lowering of the exemption by 10% is taken into account it adds over $200 to the taxes on the $500,000 white plains home, while the Budget Notice conveys the impression of a “modest” $390 School Tax increase, which if you use the City Assessor figures works out to $380, not $390.
The Budget Notice compares the result if the voters vote down the budget.
The notice reports that if the budget is voted down, a contingency budget of $183.722,424, would replace the $184,420,859 budget proposed, $700,000.
The School Budget notice, as it always does warns “A contingency budget could require adjustments in staffing (teaching, support, administrative), supplies and equipment; non-school groups using the district’s facilities would be required to pay the full cost of operation.”
The Contingency Budget which is $400,000 less than the $184.1 Million first proposed by the district until the additional $1.4 Million in new school aid was given thedistrict by the legislature, and $700,000 less than the $184.4 Million figure voters are voting on tomorrow.
Contingency Budget Reduces Taxes $14 for the $500,000 homeowner.
Should a Contingency Budget be adopted, it would reduce the burden on the BASIC STAR property owner slightly.lowering the tax rate 2 cents, resulting in a $14 saving in taxes, slightly less than the City Common Council tax cut of $27 last week.
State Aid Illusion Not Disclosed
WPCNR discovered that the cuts in the BASIC and ENHANCED STAR programs mean White Plains taxpayers, through the exemption erosion, pay for about 70% of that increased state aid themselves.
The Budget Notice closes with a glowing endorsement of the savings given White Plains taxpayers by the STAR program noting Net Basic STAR savings as being $1,285, down $1,332 from last year. But, when you figure in the $186 increase from the reduction in the BASIC STAR EXEMPTION, the saving only comes to about $1,190 for that $500,000 homeowner.
Of course if you own a home valued at more than $500,000 you know your taxes are coming up considerably more, which makes the statement in the Budget Notice that “a house of greater value will not generate additional STAR savings,” somewhat disingenuous, since a house of greater value will generatge considerably more taxes.
STAR EXEMPTION SAVINGS ERODING Rapidly.
However one matter is very strange the decrease in STAR Savings in the Budget Notice over the last two years appears to be greater than it is when you do the numbers, revealing that the total STAR savings on the $500,000 home has not declined only $47 as the Budget Notice says, but actually has declined over $300 according to WPCNR calculations.
