SENATE SEEKS TO PROTECT SENIORS' "STAR" SAVINGS

Plan Prevents Income "Creep" From Eroding Senior Tax Savings

Tuesday, March 6, 2001

Senate Majority Leader Joseph L. Bruno, Aging Committee Chairman George D. Maziarz, Senator Kenneth P. LaValle and members of the state Senate Majority today unveiled a plan to protect senior citizens whose STAR property tax savings are being whittled away as a result of modest hikes in their retirement income.

The Senate Majority plan automatically adjusts income eligibility levels for the "Enhanced STAR" property tax savings program based on annual cost-of-living increases for Social Security. That way, seniors won't face the possibility of being squeezed out of the STAR program because of relatively modest increases in their income.

As many as 13,000 New York senior citizens face the loss of some of their STAR school property tax savings this year as a result of income "creep" that is pushing them outside the Enhanced STAR program. On average, those seniors would pay $770 more in property taxes this year if the Senate Majority plan is not enacted.

"The STAR property tax savings program has reduced and even eliminated school property taxes for millions of seniors citizens, yet many of these same seniors can lose some of their STAR benefit merely because of modest increases paid by Social Security," said Senator Bruno (R-C, Brunswick). "This plan is designed to eliminate that unintended consequence of Social Security COLAs and ensure the original goal of STAR -- protecting senior citizens' right to remain in their homes after retirement."

"The Enhanced STAR program was created specifically to help seniors who were facing dramatic increases in property taxes even as their incomes from retirement savings and Social Security remained nearly static," said Senator Maziarz (R-C, No. Tonawanda). "Ironically, efforts to protect seniors against creeping inflation and higher costs of necessities has had the effect of eating away at the tax savings that STAR provides. This plan will ensure that no longer happens."

"The Senate Majority plan is nothing less than a promise kept for senior citizens who could face the loss of their homes without the tax-saving benefits provided by STAR," said Senator LaValle, an early champion of the COLA for Enhanced STAR.

Since 1973, the federal government has provided annual cost-of-living increases to Social Security recipients, based on hikes in the Consumer Price Index and other factors, ranging from 1.4 percent to 14.3 percent. The most recent adjustment was 3.5 percent in January.

Enhanced STAR provides property tax savings of a median priced home of at least 45 percent for seniors aged 65 and above who earn less than $60,000. Those with higher incomes, and property owners under age 65, are eligible for basic STAR tax savings of at least 27 percent of their annual school tax bills.

New York City residents are eligible for additional STAR tax savings on their state income tax bills.

The Senate Majority plan would immediately raise the income limit for Enhanced STAR to $62,100, and then automatically adjust the income cap each year based on federal adjustments to Social Security retirement benefits.

Governor Pataki has included a similar plan in his Executive Budget, but that plan wouldn't take effect until 2002. The Senate Majority plan would affect tax bills this year.

The Senate Majority plan is expected to cost $10 million.

Since its creation in 1997, the Enhanced STAR program has saved senior New Yorkers millions of dollars by reducing homeowners' school property taxes.

On average, an eligible senior citizen living in Rensselaer County will save $980 annually under Enhanced STAR. An eligible senior living in Saratoga County will save an average of $970 annually under Enhanced STAR. Coupled with Governor Pataki's proposed Co-STAR county tax savings proposal, which the Senate Majority supports, total annual savings for that same senior citizen in Rensselaer County will reach $1,280 each year and in Saratoga County, $1,100 annually.
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STAR FACTS:

* The Enhanced STAR program for seniors reduces taxes on a median-priced home by at least 45 percent by lowering a home's assessed value by up to $50,000.

* In many cases, eligible seniors pay no school tax at all after their STAR reduction.

* Eligible seniors can earn up to $60,000.

* Higher earners and those under 65 are still eligible for basic STAR, which provides average savings of at least 27 percent.

* Governor Pataki's Executive Budget includes Co-STAR, which provides similar savings off the county portion of property taxes for seniors and farmers only.

* The Senate Majority's budget resolution will include Co-STAR, valued at $230 Million.