The state’s popular School Tax Relief program is replete with duplicate and improper exemptions going to individuals or businesses, costing New Yorkers $13 million during the 2010-11 fiscal year that could increase to $73 million by the 2015-16 fiscal year, a state audit today found.
“The STAR program has succeeded in delivering million of dollars in tax relief, but it is difficult to ferret out abuse or even errors because it is hard to police the program. STAR exemptions could be easily gamed at a significant cost to the state,” DiNapoli said in a statement.
Enacted in 1998, New York’s STAR program provides a partial exemption from school taxes for most homeowners with incomes less than $500,000. The state’s enhanced
STAR program provides an additional benefit for senior citizens with incomes of $74,100 or less.
DiNapoli found that some municipalities were lax in their oversight, giving out the benefits on multiple homes to the same owners. Auditors examined 6,500 parcels receiving STAR exemptions in 46 municipalities.
The auditors found that nearly 20 percent of the STAR exemptions should not have been granted. Authorities in Rockland County on Wednesday found more than 500 Rockland property owners were illegally getting STAR rebates, costing the state $671,000.
Gov. Andrew Cuomo in his budget is proposing a re-registration initiative for the STAR program to crack down on abuses.
DiNapoli’s report found that there were nearly 2.8 million basic STAR exemptions in the 2010-11 fiscal year and 624,474 enhanced STAR exemptions statewide.
Aimed at helping to offset New York’s property-tax burden, STAR benefits—funded through the state budget—have rapidly increased. The state’s cost grew from $582 million in 1999 to $3.2 billion in 2011, the report found. DiNapoli said the cost could grow to more than $3.7 billion by 2016.
DiNapoli said it is too easy to defraud the system because STAR program application does not require information that identifies property owners, such as Social Security numbers, making it difficult for local assessors to detect duplications.
Also, assessors do not have access to state databases that would allow them to track STAR exemptions outside their towns, if, for example, someone was claiming benefits in two different towns.
Some of the problems showed that homeowners were receiving STAR benefits for their primary residences and and second homes. Additionally, a homeowner may have died and a
relative who inherited the property continued to receive the exemption.
The report noted that in Monroe County, a homeowner who received an Enhanced STAR exemption died in September 2009, but the property continued to receive the exemption.
DiNapoli said some municipalities have cracked down on STAR abuse, including Chili in Monroe County and Greenburgh in Westchester County. Others audited in the report included Beekman in Dutchess County; Carmel in Putnam County; Greece in Monroe County; and Yorktown and Yonkers in Westchester.
DiNapoli proposed a number of steps to weed out abuse in the system. He said state leaders should require a unique identifier for each STAR recipient and to create a more useable state database some various municipalities can look for duplicate STAR beneficiaries.