GOP Senators Propose Spending $6B To Cut Property Taxes

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The New York Sun

Senate Republicans, their legislative majority under threat, are proposing to spend $6 billion over two years to decrease property taxes of state homeowners.

Under the plan proposed by the Republican leader of the Senate, Joseph Bruno, homeowners would receive tax rebates totaling $2.6 billion next year and $3.4 billion in 2008. The plan quadruples the $875 million in tax rebates that Albany delivered to households in the fall as an add-on to Governor Pataki’s School Tax Relief exemption program.

A legislative source said Mr. Bruno intended to announce the plan with a press conference two weeks ago but put off releasing the news when it emerged that he was a subject of a federal investigation concerning possible conflicts of interests stemming from his outside business work. Mr. Bruno released details of the plan yesterday through a press release instead of a press conference, where he usually takes questions from reporters.

Senate Republicans are hoping that the tax plan will help to counter the negative publicity surrounding the federal probe. The plan was announced a day after Governor-elect Spitzer plucked a popular Republican senator from Mr. Bruno’s Senate majority, tapping Michael Balboni of Long Island to be his chief homeland security official. Republicans now control 33 of the Senate’s 62 seats and face the danger of losing Mr. Balboni’s seat to Democrats in a special election.

Under the Republican plan, homeowners in Westchester, where houses are assessed at a median of about $600,000, would see their average rebates jump to $1,492 by 2008. Senior citizens would be awarded even greater rebates. The savings would be tacked on to the STAR program, under which the state pays local school districts money to offset property taxes through exemptions from assessed home values. Westchester homeowners already receive basic STAR exemptions of an average of $1,840.

New York City residents under the Senate plan would receive personal income tax credits worth on average $345 in 2007 and $460 the next year. Under STAR, New York City residents receive personal income tax credits in addition to exemptions on their property taxes, which are far lower than the state average.

While campaigning for governor, Mr. Spitzer came out with his own property tax plan that called for channeling billions of more state dollars into STAR. He proposed tripling the size of the STAR program at a cost of $6 billion over three years and making middleclass homeowners eligible for greater exemptions. New York now spends $3.3 billion a year on STAR, which goes to about 3.3 million New Yorkers.

A spokeswoman for Mr. Spitzer called Mr. Bruno’s plan “constructive” and said the governor-elect would work with lawmakers to craft a property tax plan during the legislative session. Mr. Spitzer is facing a $2.4 billion budget deficit in the 2007-2008 fiscal year and is proposing at least $4 billion to $5 billion in extra spending, including his property tax plan.

New Yorkers pay nearly 50% more property taxes than the national average, according to a recent report by the state comptroller. In some areas outside of the city, taxes are 73% higher than the national average.

The $875 million tax rebate plan approved by the Legislature this year will carry over into the 2007-2008 budget unless Mr. Spitzer moves to block the funding. Legislators wrote the rebate bill in a way to ensure that money still flows to homeowners, even if Mr. Spitzer refuses to support paying for the plan. Homeowners would receive equivalent savings through refundable income tax credits.


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