State Senator Michael Balboni (R-East Williston) announced his support of a new proposal to help alleviate the burden placed on Long Island's property taxpayers. Through the State Senate's REBATE-NY plan, homeowners in Nassau and Suffolk counties would receive $532.8 million in school tax rebate checks directly from New York State and save another $71 million through larger state school tax exemptions. In addition, REBATE-NY reforms the school budgeting process and school district management, promotes local government efficiency and establishes a "Blue Ribbon" commission to review rising school spending and district financing.

"Homeowners on Long Island, particularly senior citizens, are struggling to keep up with the rising property tax burden. The bottom line is that Long Islanders and all New Yorkers are paying too much in property taxes," said Senator Michael Balboni. "The REBATE-NY plan will build on the success of the STAR program and provide every homeowner with a property tax rebate check, mailed to their house each year. Plus it includes incentives to encourage consolidation of local government services and provisions for greater fiscal accountability of school districts. Together, it's a comprehensive strategy to bring badly needed and meaningful property tax relief to New York State taxpayers. Enactment of this legislation is on the top of my 2006 agenda."

To investigate the underlying causes of the rising property tax burden imposed upon homeowners, the New York State Senate commissioned a study conducted by the internationally-recognized consulting firm Global Insight which reveals Long Island's total local government (including school district) and education spending exceeds both the statewide average and that for downstate suburban counties.

While school districts in Nassau and Suffolk counties receive $270 million (74 percent) and $515 million (60 percent), respectively, more each year than they did a decade ago, the average property tax bill for Nassau County households is 87 percent above the statewide mean and 24 percent higher than the downstate suburban region. In Suffolk County, the average property tax burden is 47percent above the statewide amount, but 3 percent lower than the downstate suburban mean. Notably, money saved by Long Island homeowners through the state's School Tax Relief ("STAR") program has helped lower these figures.

Under the tax rebate plan, Long Island homeowners would receive $532.8 million in direct rebate checks from New York State. This would be in addition to the homeowner's STAR school tax exemption. To help homeowners pay their 2006 property tax bills, the state would begin issuing rebate checks in September 2006. In 2006, the rebate would equal 30 percent of the homeowner's STAR savings for the 2005-06 school year, with the rebate rising to 50 percent in 2007 and 75 percent in 2008. Because of Long Island's high school taxes, rebate checks to Nassau and Suffolk County residents would be among the state's largest.

Average REBATE-NY Direct Rebate Checks on Long Island

Basic STAR Enhanced STAR

2006-2007 2008-2009 2006-2007 2008-2009

Nassau County - 2006-07 $300; 2008-09 $750; 2006-07 $528; 2008-09 $1,320

Suffolk County - 2006-07 $291; 2008-09 $728; 2006-07 $444; 2008-09 $1,110

To help alleviate the impact of rising home prices, the STAR exemptions for Long Island homeowners have risen by roughly 33 percent during the last five years but, these increases have not fully offset rising assessments. As a result, the STAR exemption now covers a smaller portion of homeowners' school taxes. For example, the Enhanced STAR exemption represented 42 percent of an eligible Long Island senior's school tax bill in 2001, but only 30 percent this year. Similarly, the value of a Basic STAR exemption has fallen from 25 percent to 18 percent.

To maintain seniors' eligibility for Enhanced STAR, the program's income limit is increased by Social Security's cost-of-living adjustment every year. Through REBATE-NY, the Senate would also annually raise both the Basic and Enhanced STAR exemptions based upon growth in local home values. Through this regular increase, school property taxpayers on Long Island would save another $71 million each year.

1997, the Senate championed creation of STAR to provide all homeowners with an exemption on their school taxes. Every homeowner is eligible to receive the Basic STAR exemption, while seniors who are 65 years of age and have a household income of $66,050, or less, qualify for the larger Enhanced STAR exemption. Currently, STAR saves Long Island homeowners $710 million each year. This is 28 percent of STAR's statewide property tax savings and approximately twice Long Island's share of the state's population.

Average STAR Savings on Long Island

Basic STAR - Nassau County - $1,000

Enhanced STAR - Nassau County - $970

Basic STAR - Suffolk County - $1,760

Enhanced STAR - Suffolk County - $1,480