State Cuts STAR Reimbursements
to Districts
School districts around the state are bracing for a cut in the reimbursements they receive from the School Tax Relief program. The Huntington School District alone expects to sustain a reduction of about $103,000.
The STAR program provides a partial property tax exemption to homeowners on their primary residence. The program is divided into two parts: basic and enhanced, the latter of which offers expanded benefits to senior citizens who meet certain financial requirements.
The state reimburses district for the lost revenue as a result of the STAR program. However, now with the state's finances under severe stress, New York is reducing STAR payments to districts by 1.1 percent.
Since state legislators missed the April 1 statutory deadline for enacting a budget, finally agreeing on a plan over the summer, districts didn't plan for the cut in STAR payments when they developed their own budgets last spring.
"This action by the state places another burden on districts and property taxpayers," Superintendent John J. Finello said. David H. Grackin, Huntington superintendent for finance and management services, said the district "usually receives the STAR reimbursement payment in late December." School officials are disappointed the payment will be much less than anticipated.
The only way for districts to address the reductions now would be to either set the tax rate higher than estimated when voters went to the polls last May, appropriate money from their respective fund balance to offset the STAR cut or reduce spending elsewhere in their budget.
The STAR program dates to a proposal by then Governor George E. Pataki, which was passed by both houses of the legislature and signed into law on August 7, 1997. Last year the legislature eliminated the middle class STAR rebate program that resulted in eligible homeowners receiving checks each October.