New York seniors could get a big tax break, but others would pay the tab

Retired police officer Charlotte Dillas, who has lived in her modest two-bedroom home on Mechanics Avenue in Tarrytown for more than 30 years, considered selling her home this summer, with her property tax bill rising steadily .

But his thinking about where to live on an income of around $35,000 changed in August after learning of changes to state tax laws. These changes could reduce his tax bill from $9,000 to around $2,700.

That could leave Dillas with an 80% cut on the full assessed taxes on her two-bedroom home because she is already receiving the state-funded financing. Improved STAR program for seniors, worth $4,100 per year. The city values ​​his home at $412,000.

“That would be the best thing,” said Dillas, a 1968 graduate of Sleepy Hollow High.

But that won’t happen unless the four taxing jurisdictions that levy taxes on his home agree to raise the income cap for New York State’s most generous tax break – the seniors’ exemption. Disabled homeowners in New York get a similar exemption whose income limit would also increase.

The exemptions reduce the assessed value of his home by 50%, with other exemptions, like the enhanced STAR or the veterans exemption added to the senior exemption.

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To qualify for the full tax cut, Dillas would need approval for higher income limits from the City of Greenburgh, Village of Tarrytown, Westchester County and Tarrytowns School District.

The current income limit is $30,000 for a 50% reduction, with a sliding scale up to $37,800. The new income limits increase the cap to $50,000 for a 50% reduction and up to $58,400 on the sliding scale.

It’s a decision every school district, city and county in New York will make this year. And that decision has implications for more than senior homeowners looking to age in place. Unlike STAR exemptions, which are filled with state money to make school districts whole, the senior tax exemption is offered without state funding.

This means that the tax reduction for elderly homeowners will be clawed back by all other taxpayers in these jurisdictions. So far, a few cities, as well as Westchester and Rockland counties, are expected to act this fall on proposals to raise the income cap. Putnam County is considering a proposal, while Orange County plans to address the revenue limit as part of its 2023 budget discussions this fall.

Spokespersons for the Ulster and Dutchess county executives declined to comment.

Some municipalities are not yet committed, knowing that any increase in exemptions for seniors means that their savings will be supported by other taxpayers.

“Our board is very, very sensitive to our ratepayers,” White Plains Schools Superintendent Joe Ricca said. “We need to have an idea of ​​the number of households we are talking about. If it’s 50, that’s not a huge lift. But if it’s thousands, it could be a different scenario.

Greenburgh supervisor Paul Feiner said he supports raising the income limit to $58,400 – the cap that has been in place for several years in New York. He recalls that suburban lawmakers have backed such a bill since 2016.

“I don’t think it’s a budget killer for us,” Feiner said. “I’ve heard old people enthusiastic about it before.”

The passed bill was sponsored by Senate Majority Leader Andrea Stewart-Cousins, D-Yonkers, and Assemblyman Tom Abinanti, D-Mount Pleasant.

“When you look at the realities, in (New York), one in seven seniors lives below the poverty line, so we gave municipalities the option to make it a little more affordable for seniors,” he said. she declared. “Look at the older people and their contributions over the years, who would love to stay at home but need a little more help.”

Still, Yonkers City Council Speaker Lakisha Collins-Bellamy said the upcoming decision comes as everyone in the city grapples with rising prices.

“A lot of our seniors are on fixed incomes, and we don’t want to force any of them out of their homes,” she said. “But if we collect less tax from them, we have to collect the money elsewhere. I don’t want to burden residents who don’t qualify.”

Karen Belanger, executive director of the Westchester/Putnam School Boards Association, said the upcoming discussions over exemptions for seniors are reminiscent of the sometimes noisy debates eight years ago after the state legislature gave municipalities and schools the ability to provide tax breaks to veterans.

The biggest difference in the coming debate is that veterans’ exemptions were based on military service, not annual household income, Belanger said.

“In some ways it’s an easier decision because it’s based on income,” said Belanger, who served on the Rye City School Board during those discussions. “I felt at the time that if the state gave the tax relief, they had to pay it. That leaves school boards having to decide between different groups how much they will pay.”

Whether the seniors will be as organized and vocal as the veterans remains to be seen. The New York Chapter of AARP, the state’s largest lobby group for seniors, supports the law, noting that the income limit was last raised in 2009.

“Strengthening these programs goes right to the heart of ensuring affordable and accessible housing — a cornerstone of an age-friendly state, so that all neighborhoods are livable for people of all ages,” said David McNally, AARP New York’s Director of Government Affairs and Advocacy.

In Ramapo, Supervisor Michael Specht said he expects city council to hold a public hearing in September. He expects the shift in tax burden to be minimal for the rest of the city’s ratepayers.

“You have to balance the benefits this will bring to disabled, low-income older homeowners with the added burden on the rest of homeowners,” Specht said. “We expect it to be very minimal.”

Tax exemption schedule differs by county

The timeline for action to implement the exemptions for 2023 varies widely across the Hudson Valley in New York’s seemingly ad hoc tax system. Such changes are generally in place 60 days before the date of taxable status, to give owners the opportunity to claim the benefit.

With that October 15 date in Yonkers, it looks like any action in the city wouldn’t go into effect until the next tax year. The City of White Plains has a date of December 1, which means action should be taken by October 1.

The date is March 1 for Rockland, Dutchess, Putnam and Orange counties, so officials expect a decision by the end of the year.

“We’re hoping to do it in October or November to give people plenty of time,” said Ramapo appraiser Scott Shelder, who serves as legislative coordinator for the New York State Appraisers Association.

New York State to provide data

The biggest question facing policy makers is how much of the burden of ownership will be shifted from the elderly to the rest of a community’s taxpayers.

“It would be helpful for us to know what that means, before we get pushed into a corner and asked if we’re going to be for our elders or not,” Haverstraw supervisor Howard Phillips said. “Tell us how much we will extend to the rest of the taxpayers.”

The New York State Department of Tax and Finance has this information, but it has not yet shared it with city leaders. Under the state’s Enhanced STAR program, senior homeowners must provide documentation that their household income is less than $92,000.

This data would include income documentation for seniors who earn up to $58,300 would be among those who would qualify for the increased exemption.

According to department spokesman James Gazalle, there are currently 657,000 senior households in New York that are eligible for the Enhanced STAR, including 74,000 in Westchester, Putnam, Rockland, Dutchess, Ulster and Orange counties. .

This report should be sent to the municipalities in September.

Follow David McKay Wilson on Twitter @davidmckay415.

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