Port Henry School districts throughout Essex County have been deciding whether or not to implement a Veterans Tax Exemption law signed by Gov. Andrew Cuomo. The legislation allows school districts to offer the Alternative Veterans Exemption.
While expressing support for veterans, most school administrators have complained that not enough information was available on the impact it might have on their districts. Although some schools adopted the exemption by the March 1 deadline, most did not.
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 other 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 veterans 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 needed a second public hearing.
If implemented, the Veterans 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.
Therefore, schools will lose refunds from the state in relation to the STAR exemption.