Hochul wants to send $2.2 billion in property-tax rebate checks in fall of election year

Gov. Kathy Hochul’s election year budget has a $2.2 billion one-shot gift for an estimated 2 million New Yorkers homeowners, teed up for fall delivery, just as voters focus on the 2022 gubernatorial election.

Hochul wants to take $2.2 billion from the state’s projected surplus of $5 billion and return it to homeowners who earn up to $250,000 a year. It will be allocated through the state’s STAR property tax relief program, which pays a portion of school taxes for eligible homeowners.

It’s one of the state’s few programs that provides the greatest benefits to homeowners in wealthy downstate suburban communities in the Hudson Valley and Long Island.

While Hochul has billed the program as a “middle-class” initiative, the STAR program sets a cap on a family’s income at $500,000. Median household income in New York is $69,000, according to the US Census.

The election season checks will average $970 for those owning property outside of New York City, but they will be substantially higher in high-tax school districts in the Hudson Valley.

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The statewide average STAR benefit is $762, according state spokesman James Gazelle. So Hochul's check could be as much as 127% higher than what you already receive. That means if your STAR benefit today is $1,000, the additional check under Hochul's plan could be as much as $1,270.

“Let’s talk about putting more money into people’s pockets,” said Hochul, the Erie County Democrat.

That money has more than doubled in the 13 days since Hochul’s State of the State address. That day, she proposed a $1 billion property tax rebate program. In her budget address on Tuesday, the program was valued at $2 billion. Then Budget Director Robert Mujica said it would be worth $2.2 billion.

“We have a surplus and we are doing major commitments in spending,” said Mujica. “We want to get that dividend back people to New Yorkers who have suffered in the pandemic and need relief.”

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The rebate program was the most significant tax news in the budget. It also included accelerated income-tax cuts that began in 2018 under Gov. Andrew Cuomo, which were to be phased in over seven years.

Hochul wants to consolidate the final rate reductions, worth an estimated $1.2 billion. But taxpayers won’t see any impact from the changes until 2023.

The tax rebates are considered a tax credit, which will apply to the 2022 tax year. But waiting for the tax credit to be implemented when you fill out your tax forms in 2023 won’t come soon enough for the Hochul administration, which wants them issued more quickly.

Credits will be issued before the 2022 tax returns are printed, and will be “directly sent to eligible homeowners being in the Fall of 2022,” said budget documents.

Tax structure unchanged

Peter Warren, research director of the Empire Center for Public Policy in Albany, said the infusion of cash to homeowners this fall will provide some respite for New Yorkers who pay some of the nation’s highest property taxes. But it will do nothing to provide structural changes in the overall tax system, he said.

“It’s a one-shot, giving people back their money,” said Warren. “I’m sure the legislature is going to look to spend on election-year items in the budget. And these rebates are going to go out right before her election.”

With the rebate checks connected a percentage of your current STAR benefits, how much you receive in the fall of 2022 will depend on how much you currently receive through STAR, and what percentage is decided upon by the state Legislature.

The state Budget Office declined to answer questions regarding the program.

The disparity in STAR benefits is huge, even within counties. So your benefits from Hochul's tax relief program will vary widely because your check will be tied to what you already receive.

In Westchester’s Pocantico schools, in the town of Greenburgh, the basic STAR benefit is $738, compared to $2,166 in the town of Cortlandt served by the Putnam Valley schools.

Enhanced STAR benefits for low-income seniors are more than double the basic amount, with the Pocantico Enhanced STAR benefit at $1,717, compared to $4,525 in Cortlandt.

In Broome County, meanwhile, basic STAR benefits range from $415 in the town of Triangle to $969 in the city of Binghamton while Rockland County STAR benefits range from $819 in the East Ramapo district to $2,336 in Haverstraw in the North Rockland district.

Enhanced STAR benefits in Rockland range from $1,906 in East Ramapo to $5,436 in Haverstraw.

Follow Tax Watch columnist David McKay Wilson on Facebook or Twitter @davidmckaywils1. He has written about Hudson Valley public affairs since 1986. Check out his latest columns at lohud.com

This article originally appeared on Rockland/Westchester Journal News: NY Gov. Hochul wants $2.2 billion in rebate checks sent in fall 2022