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Tax Relief

Town Assessor Ron Devine, above, said the state abolished the March 1 deadline to apply for STAR exemption, meaning that residents won’t have to wait a full year to receive their exemptions. Photo by Giselle Barkley

The New York State Department of Taxation and Finance will see an influx in state school tax relief applications after the state revamps its STAR program.

The change affects new homeowners, buyers and those building a home in the Basic and Enhanced STAR Programs. Residents who changed their primary residence from last March onward, must apply to the program, through the NYS Department of Taxation and Finance, for an approved exemption. Long Islanders who started constructing their homes within the same time frame are affected, according to Town of Brookhaven Supervisor Ed Romaine (R) and Town Assessor Ron Devine.

Devine said residents who have the program up to the 2015-16 tax year will maintain their exemptions. According to Devine, “anyone who is in the system is in the system.” The town will also maintain its approximate 15,000 Enhanced STAR program holders. These holders will receive renewal letters this fall.

The Enhanced STAR program benefits senior citizens 65-years-old and exempts the first $65,300 of the home’s value from school taxes. The basic STAR program, however, is available for owner-occupied primary residences where the homeowners’ and their spouses’ income is less than $500,000. The program exempts $30,000 of the home’s value from school taxes.

According to Romaine, the change in the application process may only affect 3 to 5 percent of homes in the town. But the supervisor questioned if the NYS Department of Taxation and Finance bit off more than it could chew.

“My big concern is that if they’re not staffed, there’ll be a huge backlog of processing that will occur,” Romaine said during a meeting at town hall. “People won’t get their check on time, and it will put people who are either buying a house or building a house in severe disadvantage.”

But the NYS tax department said this change won’t be an issue. According to the department, it successfully processed 2.4 million tax returns after implementing the initial STAR registration program in 2013. The department typically receives around 150,000 applications annually.

The New York State Legislature passed the law earlier this year to change how towns enforce the program within the state. New York State Gov. Andrew Cuomo (D) called for the new application process for first-time homeowners and buyers in his 2017 Executive Budget. The budget was approved on April 1.

“The STAR exemption is the only property tax exemption funded by New York State,” the NYS tax department said in an email. “Therefore, it’s more appropriate and efficient for it to be administered by the state rather than by local assessors.”

According to the NYS tax department, residents can start applying through the department in the upcoming weeks by calling the department or visiting its website. Although residents once received credits on their income tax forms, holders receiving an exemption will get a check in the same amount as their STAR benefit.

For more information about the STAR program, residents can call the Town Assessor’s office at 631-451-6300. New homeowners can apply for STAR with the NYS Department of Taxation and Finance by calling 516-571-1500 or visiting its website at www.tax.ny.gov.

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The Port Jefferson power plant sits along the edge of Port Jefferson Harbor. Photo by Elana Glowatz

A provision in the new state budget sets aside $30 million that could support communities where a power plant has closed and stopped paying property taxes.

According to the budget bill that state lawmakers agreed upon last week, that sum would be available for a local government, school district or special district — such as a library or fire district — where an electric generating facility has stopped operating, causing a reduction of at least 20 percent of the money it owed through property taxes or payments in lieu of taxes, commonly known as PILOTs.

There are limits to the provision, however: The bill says the New York State Urban Development Corporation will distribute the relief funds on a first-come, first-served basis and will not offer the support to a specific group for more than five years. Additionally, in the first of the five years, the corporation will not award funding equal to more than 80 percent of the local entity’s lost revenue.

Port Jefferson Village could possibly be on the receiving end of some of the $30 million in the pot, dubbed the “electric generation facility cessation mitigation fund.” That community’s power plant — which company National Grid owns and operates, and sells the power generated to utility PSEG Long Island for distribution — is old and runs on antiquated technology. For the past several years, village residents have waited to learn the fate of the plant, whether it will be reconstructed to keep serving Long Island or dismantled.

A lot hangs in the balance for the plant’s neighbors: Property taxes from the site fund more than 40 percent of the local school district’s budget and a significant portion of the Port Jefferson Village budget.

“We’d soak up a lot of it,” village Trustee Larry LaPointe said about the relief fund, noting that his government’s budget gets about $1 million in property taxes from the local power plant in addition to the school district’s hefty share. “But we certainly appreciate any efforts” to help mitigate the impact on the community.

The state budget provision specifies that local entities seeking assistance, once a power plant’s owner serves official notice it plans to retire the facility, will be helped in the order they apply for relief, but only after the facilities go offline. The urban development corporation will decide the amount of the annual assistance payments based upon how much revenue is lost.

Port Jefferson schools currently get more than $18 million from the plant, between taxes and PILOTs. Superintendent Ken Bossert said, “We are hoping that a resolution can be found that will not place an unfair burden on the home and business owners … in order to maintain the excellence of the school district.”