Elizabethtown Towns throughout Essex County have been deciding whether or not to implement a Veterans Tax Exemption law signed by Governor Cuomo on December 18, 2013. The legislation allows Boards of Education of school districts to offer the Alternative Veteran’s Exemption (Real Property Tax Law § 458-a).
Although all school districts undoubtably support their veterans and some school districts have adopted the law, the majority have complained that not enough information was available on the impact it might have on their districts, thus not implementing it by the March 1st deadline.
The Alternative Veterans’ Exemption allows school districts to provide a 15 percent reduction in assessed property value to veterans who served during wartime and another 10 percent reduction to veterans who served in combat zones and a larger break to disabled veterans. Previously, this tax break could only be offered by municipalities but the law was changed in December.
Implementing a tax exemption causes a redistribution of taxes among taxpayers, or a tax shift. Exemptions do not affect the total amount of money a district needs to raise – the tax levy. Therefore, if a town’s assessed value decreases due to exemptions, then all taxpayers would need to pay more to make up the difference.
School districts had to hold a public hearing prior to adopting this exemption. Once the hearing took place, the veteran’s exemption could be adopted by resolution of the Board of Education or no action taken. If the Board wished to increase or decrease the New York State exemption limits ($12,000, $8,000, $40,000), it must have held a second public hearing.
If implemented, the Veteran’s Exemption would be applied first to an eligible resident’s property, followed by the STAR tax exemption. New York State reimburses school districts for the STAR exemption revenue it has lost; it will not be doing the same for the Veteran’s Exemption.