State Comptroller Thomas P. DiNapoli last week raised substantial questions about abuse of the state School Tax Relief (STAR) program when an audit showed about 20 percent of the STAR exemptions across the state tested by the comptroller should not have been granted. Rockland County District Attorney Thomas Zugibe followed this report with the results of his own investigation that uncovered misuse of the system in his county.
The STAR program was enacted under the leadership of former Gov. George E. Pataki who was concerned about the ever-rising burden of property taxes to support the school systems of New York state. The tax break, which benefits families with income lower than $500,000 a year and provides additional support for senior citizens whose income is less than $74,100, was enacted in 1997. The initial cost to the state was $582 million. The cost rose to $3.2 billion last fiscal year and is expected to be $3.7 billion in the next fiscal year.
The STAR exemption has helped moderate the local costs of supporting local school districts, but it has not substantially reduced the property tax. The tax break was crafted in such a way that commercial properties such as shopping malls and factories received no benefit from the extra state aid. The measure actually transferred money away from commercial enterprises, resulting in another tax increase for businesses in tax-challenged upstate New York economy.
While no homeowner will complain about the STAR exemption, the special tax break has only masked the ever-escalating costs of school districts and has unfairly benefited school districts rich with commercial/industrial property. That has widened the gap between rural districts and wealthy districts surrounding New York City.
Cracking down on people who abuse the system by applying for and being granted a STAR exemption for a full-time residence and a summer home is welcome news. But exposure of abuse deals only with the margins of the issue of the cost of New Yorks school system. While fraud reflects large amounts of cash, the extra money would not come close to balancing the books of any rural school district.
In particular, Northern New York especially St. Lawrence County is plagued by severely declining school populations and withering school districts that are challenged to provide even the basics of education required for the next generation to fully join Americas economy. While the state focuses on fraud, the pleas for legislation to allow significant cost saving and education enhancing consolidation of high schools in the north country are ignored.
The time is at hand for the north country political delegation in Albany to insist that the legislation requested by the St. Lawrence Board of Cooperative Educational Services and small school boards in St. Lawrence County be approved so families will know that their children will be afforded a quality education.