Plan to Link Tax Breaks to Income
February 5, 2008
A bipartisan group of lawmakers unveiled a plan Monday to link property tax breaks to household income, which would potentially provide fewer people with checks but give tax breaks to those most in need.
The “Middle Income Circuit Breaker” proposal, led by Sen. Betty Little, R-Queensbury, and Assemblywoman Sandra Galef, D-Ossining, would retain the $250,000 income limit that currently applies to School Tax Relief program rebates.
But rather than sending homeowners a rebate check based on their STAR savings, the circuit breaker would base it on their state income tax bills.
If it were to pass this year, New Yorkers could conceivably receive the rebates in April 2009, when their income taxes are due, lawmakers said.
“It is wrong that someone should be taxed out of their home because their income has not kept pace with their property taxes,” said Little. “Our legislation would create a fairer system.”
The proposal is similar to Gov. Eliot Spitzer’s Middle Class STAR rebate, which also has a $250,000 income cap and uses income tax brackets.
An upstate family with adjusted gross income of $90,000 or less, for example, would get a rebate if its total property tax bill was more than 6 percent of its income. In that case, the family would get a credit of 70 percent of the overage. In the costlier New York City area, the rebate would start with incomes of $120,000 or lower.
For households earning between $90,001 to $150,000, the tax bill would have to be in excess of 7 percent of income; for $150,001 to $250,0000, it would have to be over 8 percent.
People would also be required to have lived in their homes for five years.
This would give the biggest breaks to families whose property taxes are a bigger share of their earnings.
While some 2 million people now qualify for STAR rebates, about 1 million would qualify under this plan, said Frank Mauro, executive director of Fiscal Policy Institute, a labor-backed think tank that supports the idea.
Jeffrey Gordon, a spokesman for the governor’s budget office, said he had not examined the proposal and could not comment on it.
Source: Times Union
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