Friday, July 07, 2006

What's In Your Wallet?

Banking On Legislature's Property Tax "Rebates" Won't Get You Too Far

Newsday has analyzed the property tax rebates to be offered to New York residents this fall (courtesy of our friends in the NYS Legislature, who, apparently, favor throwing your money at problems, rather than making real efforts to solve them). [SEE A range of rebates for LI homeowners.]

Anyway, as it turns out -- based on a school district by school district breakdown -- Long Islanders are not likely to get that much money put back into their pockets as they may have anticipated, and certainly nothing that will make even the slightest dent in that ever-escalating property tax bill.

The average rebate for the Long Island homeowner (based not on taxes paid, but rather, on school district tax rates), will be in the neighborhood of $200. [Seniors, benefiting from the so-called "enhanced STAR" credit, will see a slightly higher rebate.]

So, by way of example, if you reside in the Long Beach school district, your rebate will average $166.87. Those in the Glen Cove school district will receive $189.49. Westbury school district, $316.10. Garden City school district, $166.70. Elmont residents will average $258.51, while those in the Great Neck school district will get a check for (or can claim a credit on their 2006 NYS Tax Return in the amount of) $139.43.

The average "rebate" amount for Nassau County is $235.56. In Suffolk, where tax rates are, on average, lower, the number drops to $185.51. [If you happen to reside in the Sagaponack school district in Suffolk County, your likely "rebate" will total a whopping $7.49.]

The highest "rebate" on Long Island will go to residents in the Hempstead school district, where the tax rate is $21.42 per $1000 in assessed value.

Click HERE for Newsday's district by district analysis.

The problem with the "rebate" formula, according to a Newsday interview with Frank Mauro, of the Fiscal Policy Institute in Albany, is the inexorable link between the rebate and the State's STAR program. [In theory, homeowners should receive a "rebate" equal to approximately 30% of the STAR credit as appears on their property tax bills.]

The problem, Mauro told Newsday, is that the rebates are based on county and school district averages, not individual property tax burdens or incomes. As a result, he said, two homeowners with hugely disparate property taxes and incomes could receive the same rebate.

Keep in mind, too, that this "rebate" is treated as a refund for State tax purposes and, therefore will have to be treated a such (i.e., reported as income) on subsequently filed tax returns. Ahh, the State giveth, and the State taketh away...

So, shortly before election day -- when every State Legislator in New York will be asking for your support and your vote -- watch your mailbox for a rebate check from Albany.

Then, after you vote, but on or before April 15, 2007, get out your check books and write a check to NYS Income Tax. [Contact your local Receiver of Taxes for applicable deadlines for payment of your "enhanced" property tax. Statements will be mailed to homeowners accordingly.]

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