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ALBANY---The state Senate has passed what is being hailed as major property tax reform legislation that could result in the complete elimination of residential school property taxes in school districts that vote to phase out property taxes over five years, with revenue replaced with additional State funding.
Under the provisions of the bill (S.8360), every school district would be authorized to take a public vote to determine if real property taxes on primary residences (STAR eligible properties only) would be phased out over five years and be replaced with additional state funding. This vote would be held on the third Tuesday in May (school district budget vote day).
The proposition would be placed on the ballot only after the submission of a petition which contained at least 25% of the persons who voted in the previous school budget vote (or in the previous general election in the Big Five cities). Districts which enter into this system would be required to reduce residential real property taxes on primary homes by 20% annually until such tax was eliminated.
A new state aid formula would be created to fully reimburse districts for this reduction in local tax collections. Under this system, primary homeowners would only pay a tax for the local share of school facility costs.
In 2005, primary residential homeowners paid approximately $9 billion in school property taxes. If every school district entered the optional system, the 20% reduction in residential tax levies would reduce school property taxes by $1.8 billion annually. Eventually, if every school district were under this new system, State funding would fully replace the $9 billion paid by homeowners in school taxes.
Under the new system, property taxes on other properties (i.e. second homes, apartments and businesses) would continue under the current taxing system. Districts which do not enter into this financing system would continue under the existing property tax structure.
In addition, school districts would be authorized to freeze the school tax rate for seniors over the age of 70.
In addition, the Senate passed legislation (S.8410) sponsored by Sen. Elizabeth Little (R-C-I, Queensbury), that would establish a blue ribbon commission on property tax reform to study and make recommendations on alternatives to the existing real property taxation system.
"It seems everyone agrees the property tax system is broken, that it's outdated and doesn't reflect one's ability to pay," Sen. Little said. "However, reaching a consensus on how to address the issue is difficult. The commission's purpose is to examine this issue in-depth statewide, to identify the factors contributing to this growing crisis and to offer substantive recommendations that will have a lasting impact and offer property taxpayers the relief they need." 6-22-06
© 2006 North
Country Gazette
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