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Taxpayers feeling brunt of lost property tax relief

Leonard S. Gaj was stunned last week week when he opened his school tax bill.

His bill for the Cheektowaga-Sloan School District is 43 percent higher than last year's bill.

"It put me in shock," said Gaj, 86. "I've never seen school taxes go up 43 percent."

About half of the increase is due to a 2 percent cap put on the STAR tax relief program.

New York property owners are awaiting a cap on property tax hikes to kick in next year, but some are seeing something new in their school tax bills this year, thanks to Albany: higher property taxes.

Gov. Andrew M. Cuomo proposed, and the Legislature adopted in the 2011 state budget, a 2 percent cap placed on the growth of the STAR property tax program. For Albany, it's worth about $125 million in state STAR spending.

But for some taxpayers, like Gaj of West Seneca, it means a big tax increase.

The cap on the STAR program started with this year's taxes.

That means that if your assessment stayed the same, and your tax rate went up, your savings from STAR is only 2 percent higher.

Taxpayers in the Cheektowaga-Sloan School District, which lost $1.7 million in state aid this year, probably are feeling the brunt of the loss of tax relief more than most. While taxes were slated to rise about 10 percent when voters approved the budget in May, an increase in special-education students helped push the tax levy increase to 17 percent.

And if this was last year, with the STAR savings, Gaj's taxes would have gone up $231, or 22 percent, he calculated.

"I could live with that," he said.

But with the cap, his tax bill went up $458, or 43 percent.

"I'm not at all happy with it," Superintendent James Mazgajewski said. "There isn't a whole lot of room to maneuver. My apology doesn't make it easier."

He said the district lost $1.7 million in aid this year, and the $250,000 in savings he expected by creating a new special-education class in the district is being spent on the needs of additional special-education students who moved into the district.

The district has kept taxes stable in recent years, until this spring. The 2011-12 budget cut positions, resulting in larger classes and fewer electives and sports.

"When you're out of room to cut, this is what you end up with," Mazgajewski said. "I'm afraid a lot of districts are going to end up in the same boat."

The reduction in the STAR relief is not just in the Cheektowaga-Sloan district, but throughout the state. Taxpayers in other districts have noticed the change, too.

But the biggest impacts probably are on senior citizens with enhanced STAR, living in districts with a large increase in taxes, said E.J. McMahon of the Empire Center for New York State Policy, a conservative think tank.

Most districts in the state kept taxes relatively low this year, and the tax cap kicks in next year, he noted.

"It's the last time you'll have it," he said.

He sees the STAR program as a state subsidy of school taxes. When the program went into effect, school taxes rose but budgets were approved because seniors weren't as likely to vote against them, and most homeowners were getting a bit of a break, he said.

But STAR grows at the rate of school taxes, McMahon noted. "You can't keep underwriting everybody's taxes," he said.

What taxpayers like Gaj are feeling is "like when the novocaine wears off," he said.

"It's hard not to defend a STAR cap in my view," McMahon said.

That's not much consolation to homeowners who got unexpected bills.

"Forty three percent is kind of a whopping number," Gaj said. "Why give me a senior STAR exemption?"