Hochul wants to send $2.2 billion in property tax refund checks in fall of election year

Governor Kathy Hochul’s election-year budget provides a one-time $2.2 billion giveaway for about 2 million New York homeowners, set for fall delivery, just as voters focus on l 2022 gubernatorial election.

Hochul wants to take $2.2 billion of the state’s projected $5 billion surplus and return it to homeowners earning up to $250,000 a year. It will be allocated through the state’s STAR property tax relief program, which pays a portion of school taxes for eligible homeowners.

It is one of the few state programs that provides the greatest benefits to homeowners in affluent downstate suburban communities in the Hudson Valley and Long Island.

New York Governor Kathy Hochul delivers her first State of the State Address in the Assembly Hall of the State Capitol, Wednesday, Jan. 5, 2022, in Albany, NY (AP Photo/Hans Pennink, Pool)

While Hochul touted the program as a “middle class” initiative, the STAR program sets a cap on a family’s income at $500,000. The median household income in New York is $69,000, according to the US Census.

Election season checks will average $970 for those who own property outside of New York City, but will be significantly higher in high-tax school districts in the Hudson Valley.

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The average statewide STAR benefit is $762, according to state spokesman James Gazelle. So the check from Hochul could be up to 127% higher than what you already receive. This means that if your STAR benefit today is $1,000, the extra check under Hochul’s plan could be as high as $1,270.

“Let’s talk about putting more money in people’s pockets,” said Hochul, the Erie County Democrat.

That money has more than doubled in the 13 days since Hochul’s state of the state address. That day, she proposed a billion-dollar property tax rebate program. In his budget speech on Tuesday, the program was valued at $2 billion. Then Budget Director Robert Mujica said it would be $2.2 billion.

“We have a surplus and we are making significant spending commitments,” Mujica said. “We want to return this dividend to New Yorkers who have suffered from the pandemic and are in need of relief.”

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The rebate program was the most significant tax news in the budget. It also included accelerated income tax cuts that began in 2018 under Governor Andrew Cuomo, which were to be phased in over seven years.

Hochul wants to consolidate the final rate cuts, worth an estimated $1.2 billion. But taxpayers won’t see any impact from the changes until 2023.

Tax rebates are considered a tax credit, which will apply to the 2022 tax year. But waiting for the tax credit to be in place when completing your tax forms in 2023 will not happen. not soon enough for the Hochul administration, which wants them to be issued sooner.

The credits will be issued before the 2022 tax returns are printed and will be “sent directly to eligible homeowners in the fall of 2022,” according to the budget documents.

Unchanged tax structure

Peter Warren, research director at the Empire Center for Public Policy in Albany, said the cash injection to homeowners this fall will provide respite for New Yorkers who pay some of the highest property taxes in the country. But that will do nothing to bring structural changes to the overall tax system, he said.

“It’s a one-shot, giving people their money back,” Warren said. “I’m sure the Legislature will look to spend on election year items in the budget. And those discounts are going to come out just before his election.

Because rebate checks are tied to a percentage of your current STAR benefits, the amount you receive in Fall 2022 will depend on the amount you currently receive through STAR and the percentage decided by the state legislature.

The state budget office declined to answer questions about the program.

The disparity in STAR benefits is huge, even within counties. So your benefits from Hochul’s tax relief program will vary greatly because your check will be tied to what you already receive.

At Pocantico Schools in Westchester, in the town of Greenburgh, the base STAR benefit is $738, compared to $2,166 at the town of Cortlandt served by Putnam Valley Schools.

Enhanced STAR benefits for low-income seniors are more than double the base amount, with Pocantico’s enhanced STAR benefit at $1,717, compared to Cortlandt’s $4,525.

In Broome County, meanwhile, basic STAR benefits range from $415 in the City of Triangle to $969 in the City of Binghamton, while Rockland County STAR benefits range from $819 in the District of ‘East Ramapo at $2,336 in Haverstraw in the North Rockland district.

Enhanced STAR perks in Rockland range from $1,906 in East Ramapo to $5,436 in Haverstraw.

Follow Tax Watch columnist David McKay Wilson on Facebook or Twitter @davidmckaywils1. He has been writing about Hudson Valley public affairs since 1986. Check out his latest columns at lohud.com

This article originally appeared on Rockland/Westchester Journal News: NY Gov. Hochul wants $2.2 billion in refund checks sent out in fall 2022

Penny D. Jackson