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Plan Prevents Income "Creep" From Eroding Senior Tax Savings; Seniors No Longer Must Apply Every Year
Thursday, May 16, 2002
Senate Majority Leader Joseph L. Bruno today announced that the 2002-03 state budget includes 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 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, as many as 13,000 seniors won't be squeezed out of the STAR program because of relatively modest increases in their income. This will save those seniors an average of $770 a year in school property taxes.
"The STAR property tax savings program has reduced and even eliminated school property taxes for millions of seniors citizens, yet many seniors have lost some of their STAR benefit merely because of modest increases paid by Social Security," Senator Bruno said. "The plan that will be included in the final adopted budget will 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 new eligibility verification process will ensure that no senior who is eligible for STAR loses the benefits," Senator Bruno said. "It will be more efficient for everyone involved and eliminate the chance that someone would lose benefits because they forgot to reapply for the program."
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 last year.
In addition, the STAR application process will be changed so senior citizens no longer have to apply every year through their local assessor to verify eligibility. Under the new process, assessors will provide a list of STAR recipients to the state Department of Taxation and Finance to verify STAR eligibility.
Enhanced STAR will provide 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 plan will 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.
It's estimated that the Senior STAR plan will save seniors a total of $10 million annually.
Since its creation in 1997, the Enhanced STAR program has saved senior New Yorkers millions of dollars by reducing homeowners' school property taxes.
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