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Feb 04, 2020

NY budget plan ends annual rebates for homeowners

Each of the last six years, many New York homeowners have gotten checks in the mail from Albany that may have amounted to several hundred dollars and have been a total mystery to them, like an unexpected but welcome Halloween treat.

Those treats could end this year.

Gov. Andrew Cuomo’s budget proposal last week didn’t renew a program that had delivered increasing amounts in the last few years and was Albany’s latest version of a tax rebate for homeowners. Unless revived in budget talks with state lawmakers over the next two months, the “property tax relief credit” is over.

That program had sent checks to homeowners earning $275,000 or less if their school districts had kept their property-tax increases below the state limit, as most do. Last year, some 2.1 million households in New York got those rebates, which averaged $475 and cost the state a total of $990 million, according to the Division of Budget.

A spokesman for the budget office said this week that the governor’s new spending plan didn’t extend the program because the checks were meant to be temporary and because homeowners are reaping the benefits of the tax cap the state imposed in 2011. That cap has reduced property-tax increases to 1.8 percent a year on average, he said.

“The Budget enacted in April made the property tax cap permanent, and taxpayers will continue to see those savings grow,” spokesman Freeman Klopott said in an emailed statement.

E.J. McMahon, research director for the Empire Center in Albany, cheered the end of the rebate program on Friday, calling it a costly and ineffective way to provide tax relief and a purely political gimmick – with little political payoff for the lawmakers who pushed it.

“It’s like dropping dollars from a helicopter,” he said, dismissing the program as “the ultimate lousy idea.”

McMahon, whose organization promotes fiscally conservative policies, praised the state’s recent income-tax rate cuts – which Cuomo plans to continue in the next budget – as a better approach that offers recurring savings to all New Yorkers, not just homeowners.

He also argued the rebate checks were redundant when added to the school-tax relief homeowners already get through the state’s STAR program, which has existed for more than two decades. That redundancy brought another metaphor to mind.

“This thing was like buttering the other side of the buttered toast,” McMahon said.

Published by Record.online

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