Homeowners To See Tax Rebates Soon In Under-Cap School Districts

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Homeowners living in school districts that did not pierce the state tax cap may see a rebate check this October, thanks to a “tax freeze” program introduced in March by Governor Andrew Cuomo.

The two-year program offered an incentive for school districts to keep budgets below the 1.46-percent tax levy cap in 2014-15. The check will cover the difference between last year’s and this year’s property taxes, effectively “freezing” the rate for the taxpayer even with an increase in the levy. If the district decided to pierce the cap—as East Hampton and Bridgehampton did—homeowners will not receive a check.

Qualifying for the rebate comes with a few other conditions. According to the East Hampton School District’s business administrator, Isabel Madison, a person must prove that his or her primary residence is in the school district and can make no more than $500,000 annually.

“The rebate checks depend on people’s home assessments,” she went on to explain, just as the dollar-to-dollar amount of their tax increase would. “The higher the assessment, the bigger the check,” Ms. Madison said.

According to the Southampton School District’s assistant business administrator, Maria Smith, the tax levy in Southampton actually decreased from last year to this year. In Southampton’s case, the rebate check will be the amount of a homeowner’s tax bill multiplied by .0146, the state-mandated tax cap.

For example, she said, if a homeowner’s school tax bill last year was $2,500, that figure would be multiplied by .0146 for a rebate of $36.50.

“In our particular case, the tax burden is spread among a larger number of people this year,” Ms. Smith said, “so we’ve been very lucky because our taxes have actually gone down because people’s [overall] assessments have gone up.”

In the second year of the two-year “tax freeze,” districts not only need to stay within the cap, but also must provide a capital plan that demonstrates the use of shared services or administrative consolidation. “You don’t have to implement the plan,” said State Assemblyman Fred W. Thiele Jr., “but you just have to submit it.”

Voters in districts piercing the cap were asked to choose between a zero-percent increase and whatever the proposed tax levy increase would be, essentially “upping the ante” for school districts to keep tax levies below the cap, said Mr. Thiele.

The money to pay for the rebate comes from $1.5 billion appropriated in the state budget that will be distributed over the course of three years, according to Mr. Thiele. This year, $344 million will be designated to rebates, next year, $810 million will be designated; and in the third year, $347 million will be designated.

The “tax freeze” check is one of two rebates being sent out by New York State this month. The other is titled the “family tax relief credit,” a $350 check for “middle-income New Yorkers,” according to the state’s website.

In order to qualify for that check this year, recipients’ 2012 tax return must show proof of residency in New York for one full year; claim a child under the age of 17; show an adjusted gross income of between $40,000 and $300,000; and have had a New York State tax liability after credits of zero or more.

Those who qualify do not need to do anything specific to receive the check, according to the state’s website, and can expect to see it in the mail in mid-October.

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