Gov. Andrew M. Cuomo has proposed a property tax credit that could save Western New York homeowners who qualify for the program an average of $702 per year.
Kenneth Adams, acting commissioner of the state Department of Taxation and Finance, met with homeowners on Grand Island on Wednesday to discuss the Property Tax Relief program. Adams is a former president and CEO of Empire State Development Corp.
Only taxpayers in municipalities that abide by the state’s 2 percent tax cap would be eligible for the program. “We want to keep the focus on the cap and keep the cap in place,” Adams said.
The credit would be available to homeowners earning less than $250,000 a year and whose property tax bills exceed 6 percent of their household income. Eligible homeowners would receive a credit of up to half the amount of taxes paid over that 6 percent threshold. For example, if a family’s property tax bill totals 8 percent of their annual household income, the credit would amount to up to half of the taxes paid on that remaining 2 percent.
The true amount of the credit would be determined according to a progressive income scale that would give the most relief to households with the lowest incomes and highest tax burdens.
According to the scale, the maximum property tax credit would total $2,000 for families earning less than $75,000; while families earning $75,000 to $150,000 would max out at between $1,500 and $2,000; and families earning $150,000 to $250,000 would max out between $1,000 and $1,500.
For example, a family earning $40,000 per year and shouldering a property tax bill of $4,000 would receive 50 percent of the taxes paid above 6 percent of their household income.
In other words, that 6 percent amounts to $2,400, so the family would receive half of the $1,600 difference – amounting to an $800 credit on their income taxes.
The credit, if approved by March 31 for the 20015-16 state budget, would phase in through 2018. Cuomo’s office projects an average $702 in savings for the 113,335 qualifying households in Western New York.
A provision for renters is also included in the proposal, which would benefit qualified renters earning less than $150,000 per year.
The plan is part of the governor’s 2015 Opportunity Agenda that outlines Cuomo’s executive budget goals for the year and is projected to save 1.3 million New York homeowners $1.66 billion. The money to cover the program would come from savings from lower state spending.
The Property Tax Relief proposal has wide support, although some say it doesn’t go far enough.
The Assembly has put forth a counterproposal that approves of the tax relief, but says that it should be available whether a municipality caps its property tax increase at 2 percent or not. The Senate agrees that only taxpayers in tax-capped districts should benefit, but that the program should be opened up to anyone eligible for TAR, the state School Tax Relief program.