Enacts the property tax relief act; provides a circuit breaker credit and caps administrative services costs.
TITLE OF BILL: An act to amend the education law, in relation to capping expenditures for administrative services; and to amend the tax law, in relation to creating the middle class circuit breaker tax credit
PURPOSE: To reduce the cost of education so that New York can lower the cost to do business and provide tax relief for property owners.
SUMMARY OF PROVISIONS:
Section 1 titles this as the Property Tax Relief Act.
Section 2 amends Section 2 the education law by adding a new subdivision to define "central administration services."
Section 3 amends the education law to add a new section 1510-a to cap school district spending on central administration services at three percent of its total budget.
Section 4 amends education law to require all school districts to decrease 2014-15 school budget by the amount of administrative costs reduced under section 3 of this bill.
Section 5 amends section 606 of the tax law to create a circuit breaker to offer property tax relief to those whose property taxes are becoming too large a portion of their income.
Section 6 sets forth that this act shall take effect immediately.
JUSTIFICATION: Our current 17th century method of funding public education in New York State is outdated and broken. It has led to the highest property taxes in the nation and has unnecessarily increased the cost of doing business in New York. Unaffordable property taxes are driving people away from our communities and making it more of a struggle to raise a family in New York. If we do not change this unsustainable course, New York will not be able to attract the workers and the businesses it needs to succeed in the 21st century economy. We need to reduce the cost of living in New York State to help attract the best and the brightest from around the nation and across the world to become members of our communities to help grow our economy and enrich our communities.
One way to reduce costs in our public education system is by reducing school administrative costs. Some school districts expend almost ten percent of their budget on administration. This is unacceptable as it takes away resources from students and teachers in the classroom. This legislation proposes to cap those expenses and to reduce the tax levy in proportion to those decreased expenses. Homeowners and business owners deserve to have their education dollars actually spent in the classroom.
Another way of providing much needed tax relief is through a real property tax circuit breaker program. This would be a State income tax credit to eligible homeowners who pay a disproportional amount of property tax in relation to their household income. Many older New Yorkers are being forced out of their homes because their fixed incomes cannot support their increasing real property taxes. This circuit breaker would rightly shift the burden of paying for education to the state and away from localities and those who can least afford to pay.
LEGISLATIVE HISTORY: This is a new bill.
FISCAL IMPLICATIONS: This bill will offer tax relief to those whose property taxes are slowly eating away all of their income. This program would require New York State to forego tax revenues that it would have raised. It would also offer immediate tax relief to home owners of $1.1 billion in years two and three and $2.3 billion in years four and every year thereafter.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 6565 IN SENATE February 6, 2014 ___________Introduced by Sen. GIPSON -- read twice and ordered printed, and when printed to be committed to the Committee on Education AN ACT to amend the education law, in relation to capping expenditures for administrative services; and to amend the tax law, in relation to creating the middle class circuit breaker tax credit THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. This act shall be known and may be cited as the "Property Tax Relief Act". S 2. Section 2 of the education law is amended by adding a new subdi- vision 25 to read as follows: 25. CENTRAL ADMINISTRATION SERVICES. THE TERM "CENTRAL ADMINISTRATION SERVICES" MEANS ALL CENTRAL ADMINISTRATION SERVICES PROVIDED BY A COMMON, UNION FREE, CENTRAL SCHOOL DISTRICT, OR CENTRAL HIGH SCHOOL DISTRICT INCLUDING, BUT NOT LIMITED TO EXPENDITURES, SALARIES AND OTHER- WISE, FOR THE CHIEF SCHOOL OFFICER, THE SCHOOL PRINCIPAL, THE BUSINESS OFFICE, THE PURCHASING OFFICE, THE PERSONNEL OFFICE, THE RECORDS MANAGE- MENT OFFICE, PUBLIC INFORMATION AND SERVICES, FEES FOR FISCAL AGENTS, THE DISTRICT CLERK'S OFFICE, THE DISTRICT MEETING, AUDITING SERVICES, THE TREASURER'S OFFICE, THE TAX COLLECTOR'S OFFICE, LEGAL SERVICES, THE SCHOOL CENSUS, THE SUPPORT STAFF AND CLERICAL STAFF FOR SUCH SERVICES, OFFICERS AND OFFICES AND INDIRECT COSTS AND OTHER UNCLASSIFIED EXPENDI- TURES. "CENTRAL ADMINISTRATION SERVICES" SHALL NOT INCLUDE TEACHER SALA- RIES, TRANSPORTATION SERVICES OR CAPITAL COSTS. S 3. The education law is amended by adding a new section 1510-a to read as follows: S 1510-A. CENTRAL ADMINISTRATION SERVICES. NO COMMON, UNION FREE, CENTRAL SCHOOL DISTRICT, OR CENTRAL HIGH SCHOOL DISTRICT SHALL, IN ANY FISCAL YEAR, EXPEND MORE THAN THREE PERCENT OF ITS TOTAL BUDGET FOR CENTRAL ADMINISTRATION SERVICES, AS SUCH TERM IS DEFINED PURSUANT TO SUBDIVISION TWENTY-FIVE OF SECTION TWO OF THIS CHAPTER. S 4. The education law is amended by adding a new section 2023-b to read as follows:EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13916-01-4 S. 6565 2
S 2023-B. CENTRAL ADMINISTRATION SERVICES. IN THE TWO THOUSAND FOUR- TEEN--TWO THOUSAND FIFTEEN SCHOOL YEAR, EVERY SCHOOL DISTRICT SHALL DECREASE THE TAX LEVY BY THE AMOUNT OF THE DECREASE IN ADMINISTRATIVE SERVICES FROM THE PREVIOUS YEAR REQUIRED BY SECTION FIFTEEN HUNDRED TEN-A OF THIS CHAPTER. S 5. Subsections (yy) and (zz) of section 606 of the tax law, as relettered by section 5 of part H of chapter 1 of the laws of 2003, are relettered subsections (yyy) and (zzz) and a new subsection (xx) is added to read as follows: (XX) MIDDLE CLASS CIRCUIT BREAKER CREDIT. (1) DEFINITIONS. FOR THE PURPOSES OF THIS SUBSECTION: (A) "QUALIFIED TAXPAYER" MEANS A RESIDENT INDIVIDUAL OF THE STATE WHO OWNS OR RENTS THE RESIDENTIAL REAL PROPERTY IN WHICH HE OR SHE RESIDES, AND HAS RESIDED IN SUCH RESIDENTIAL REAL PROPERTY FOR NOT LESS THAN FIVE YEARS. (B) "HOUSEHOLD" OR "MEMBERS OF THE HOUSEHOLD" MEANS A QUALIFIED TAXPAYER OR QUALIFIED TAXPAYERS AND ALL OTHER PERSONS, NOT NECESSARILY RELATED, WHO ALL RESIDE IN THE RESIDENTIAL REAL PROPERTY OWNED BY THE TAXPAYER OR TAXPAYERS, AND SHARE ITS FURNISHINGS, FACILITIES AND ACCOM- MODATIONS; PROVIDED THAT NO PERSON MAY BE A MEMBER OF MORE THAN ONE HOUSEHOLD AT ONE TIME. (C) "HOUSEHOLD GROSS INCOME" MEANS THE AGGREGATE ADJUSTED GROSS INCOME OF ALL MEMBERS OF THE HOUSEHOLD FOR THE TAXABLE YEAR AS REPORTED FOR FEDERAL INCOME TAX PURPOSES, OR WHICH WOULD BE REPORTED AS ADJUSTED GROSS INCOME IF A FEDERAL INCOME TAX RETURN WERE REQUIRED TO BE FILED, WITH THE MODIFICATIONS IN SUBSECTION (B) OF SECTION SIX HUNDRED TWELVE OF THIS ARTICLE BUT WITHOUT THE MODIFICATIONS IN SUBSECTION (C) OF SUCH SECTION, PLUS ANY PORTION OF THE GAIN FROM THE SALE OR EXCHANGE OF PROP- ERTY OTHERWISE EXCLUDED FROM SUCH AMOUNT; EARNED INCOME FROM SOURCES WITHOUT THE UNITED STATES EXCLUDABLE FROM FEDERAL GROSS INCOME BY SECTION NINE HUNDRED ELEVEN OF THE INTERNAL REVENUE CODE; SUPPORT MONEY NOT INCLUDED IN ADJUSTED GROSS INCOME; NONTAXABLE STRIKE BENEFITS; SUPPLEMENTAL SECURITY INCOME PAYMENTS; THE GROSS AMOUNT OF ANY PENSION OR ANNUITY BENEFITS TO THE EXTENT NOT INCLUDED IN SUCH ADJUSTED GROSS INCOME (INCLUDING, BUT NOT LIMITED TO, RAILROAD RETIREMENT BENEFITS AND ALL PAYMENTS RECEIVED UNDER THE FEDERAL SOCIAL SECURITY ACT AND VETER- ANS' DISABILITY PENSIONS); NONTAXABLE INTEREST RECEIVED FROM THE STATE OF NEW YORK, ITS AGENCIES, INSTRUMENTALITIES, PUBLIC CORPORATIONS, OR POLITICAL SUBDIVISIONS (INCLUDING A PUBLIC CORPORATION CREATED PURSUANT TO AGREEMENT OR COMPACT WITH ANOTHER STATE OR CANADA); WORKERS' COMPEN- SATION; THE GROSS AMOUNT OF "LOSS-OF-TIME" INSURANCE; AND THE AMOUNT OF CASH PUBLIC ASSISTANCE AND RELIEF, OTHER THAN MEDICAL ASSISTANCE FOR THE NEEDY, PAID TO OR FOR THE BENEFIT OF THE QUALIFIED TAXPAYER OR MEMBERS OF HIS OR HER HOUSEHOLD. HOUSEHOLD GROSS INCOME SHALL NOT INCLUDE SURPLUS FOODS OR OTHER RELIEF IN KIND OR PAYMENTS MADE TO INDIVIDUALS BECAUSE OF THEIR STATUS AS VICTIMS OF NAZI PERSECUTION AS DEFINED IN PUBLIC LAW 103-286 OR ANY DISABILITY COMPENSATION RECEIVED BY VETERANS ON ACCOUNT OF INJURY OR ILLNESS INCURRED OR AGGRAVATED DURING MILITARY SERVICE IN THE WARS IN AFGHANISTAN AND IRAQ SINCE SEPTEMBER ELEVENTH, TWO THOUSAND ONE. PROVIDED, FURTHER, HOUSEHOLD GROSS INCOME SHALL ONLY INCLUDE ALL SUCH INCOME RECEIVED BY ALL MEMBERS OF THE HOUSEHOLD WHILE MEMBERS OF SUCH HOUSEHOLD. (D) "ADJUSTED RENT" MEANS RENT PAID FOR THE RIGHT OF OCCUPANCY OF A RESIDENCE. (E) "REAL PROPERTY TAX EQUIVALENT" MEANS (1) FOR TAXABLE YEARS BEGIN- NING IN TWO THOUSAND FIFTEEN, FIFTEEN PERCENT OF THE ADJUSTED RENT ACTU-S. 6565 3
ALLY PAID IN THE TAXABLE YEAR BY A HOUSEHOLD SOLELY FOR THE RIGHT OF OCCUPANCY OF ITS NEW YORK RESIDENCE FOR THE TAXABLE YEAR. IF (I) A RESI- DENCE IS RENTED TO TWO OR MORE INDIVIDUALS AS COTENANTS, OR SUCH INDI- VIDUALS SHARE IN THE PAYMENT OF A SINGLE RENT FOR THE RIGHT OF OCCUPANCY OF SUCH RESIDENCE, AND (II) EACH OF SUCH INDIVIDUALS IS A MEMBER OF A DIFFERENT HOUSEHOLD, ONE OR MORE OF WHICH INDIVIDUALS SHARES SUCH RESI- DENCE, REAL PROPERTY TAX EQUIVALENT IS THAT PORTION OF FIFTEEN PERCENT OF THE ADJUSTED RENT PAID IN THE TAXABLE YEAR WHICH REFLECTS THAT PORTION OF THE RENT ATTRIBUTABLE TO THE QUALIFIED TAXPAYER AND THE MEMBERS OF HIS OR HER HOUSEHOLD; AND (2) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SEVENTEEN AND THEREAFTER, TWENTY PERCENT OF THE ADJUSTED RENT ACTUALLY PAID IN THE TAXABLE YEAR BY A HOUSEHOLD SOLELY FOR THE RIGHT OF OCCUPANCY OF ITS NEW YORK RESIDENCE FOR THE TAXABLE YEAR. IF (I) A RESIDENCE IS RENTED TO TWO OR MORE INDIVIDUALS AS COTENANTS, OR SUCH INDIVIDUALS SHARE IN THE PAYMENT OF A SINGLE RENT FOR THE RIGHT OF OCCUPANCY OF SUCH RESIDENCE, AND (II) EACH OF SUCH INDIVIDUALS IS A MEMBER OF A DIFFERENT HOUSEHOLD, ONE OR MORE OF WHICH INDIVIDUALS SHARES SUCH RESIDENCE, REAL PROPERTY TAX EQUIVALENT IS THAT PORTION OF TWENTY PERCENT OF THE ADJUSTED RENT PAID IN THE TAXABLE YEAR WHICH REFLECTS THAT PORTION OF THE RENT ATTRIBUTABLE TO THE QUALIFIED TAXPAYER AND THE MEMBERS OF HIS OR HER HOUSEHOLD. (F) "NET REAL PROPERTY TAX" MEANS THE REAL PROPERTY TAXES ASSESSED ON THE RESIDENTIAL REAL PROPERTY OWNED AND OCCUPIED BY THE TAXPAYER OR TAXPAYERS AFTER ANY EXEMPTION OR ABATEMENT RECEIVED PURSUANT TO THE REAL PROPERTY TAX LAW. (2) CREDIT. A QUALIFIED TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAXES IMPOSED BY THIS ARTICLE, EQUAL TO SEVENTY PERCENT OF THE AMOUNT BY WHICH THE TAXPAYER'S NET REAL PROPERTY TAX OR THE TAXPAYER'S REAL PROP- ERTY TAX EQUIVALENT EXCEEDS THE TAXPAYER'S MAXIMUM REAL PROPERTY TAX, AS DETERMINED BY PARAGRAPH THREE OF THIS SUBSECTION. IF SUCH CREDIT EXCEEDS THE TAX FOR SUCH TAXABLE YEAR, AS REDUCED BY THE OTHER CREDITS PERMITTED BY THIS ARTICLE, THE QUALIFIED TAXPAYER MAY RECEIVE, AND THE COMP- TROLLER, SUBJECT TO A CERTIFICATE OF THE DEPARTMENT, SHALL PAY AS AN OVERPAYMENT, WITHOUT INTEREST, ANY EXCESS BETWEEN SUCH TAX AS SO REDUCED AND THE AMOUNT OF THE CREDIT. IF A QUALIFIED TAXPAYER IS NOT REQUIRED TO FILE A RETURN PURSUANT TO SECTION SIX HUNDRED FIFTY-ONE OF THIS ARTICLE, A QUALIFIED TAXPAYER MAY NEVERTHELESS RECEIVE AND THE COMPTROLLER, SUBJECT TO A CERTIFICATE OF THE DEPARTMENT, SHALL PAY AS AN OVERPAYMENT THE FULL AMOUNT OF THE CREDIT, WITHOUT INTEREST. (3) MAXIMUM REAL PROPERTY TAX. (A) A QUALIFIED TAXPAYER'S MAXIMUM REAL PROPERTY TAX SHALL BE DETERMINED AS FOLLOWS: (I) FOR TAX YEARS BEGINNING IN TWO THOUSAND FIFTEEN: HOUSEHOLD GROSS INCOME MAXIMUM REAL PROPERTY TAX ONE HUNDRED THOUSAND NINE PERCENT OF THE DOLLARS OR LESS HOUSEHOLD GROSS INCOME MORE THAN ONE HUNDRED NO LIMITATION. THOUSAND DOLLARS (II) FOR TAX YEARS BEGINNING IN TWO THOUSAND SIXTEEN: HOUSEHOLD GROSS INCOME MAXIMUM REAL PROPERTY TAX ONE HUNDRED THOUSAND EIGHT AND ONE-HALF PERCENT OF THE DOLLARS OR LESS HOUSEHOLD GROSS INCOME MORE THAN ONE HUNDRED NO LIMITATION. THOUSAND DOLLARS (III) FOR TAX YEARS BEGINNING IN TWO THOUSAND SEVENTEEN: HOUSEHOLD GROSS INCOME MAXIMUM REAL PROPERTY TAXS. 6565 4
ONE HUNDRED THOUSAND DOLLARS SEVEN AND ONE-HALF PERCENT OF OR LESS HOUSEHOLD GROSS INCOME MORE THAN ONE HUNDRED THOUSAND SEVEN AND ONE-HALF PERCENT OF DOLLARS, BUT LESS THAN OR EQUAL TO ONE HUNDRED THOUSAND DOLLARS ONE HUNDRED FIFTY THOUSAND DOLLARS PLUS EIGHT AND ONE-HALF PERCENT OF HOUSEHOLD GROSS INCOME ABOVE ONE HUNDRED THOUSAND DOLLARS MORE THAN ONE HUNDRED FIFTY NO LIMITATION. THOUSAND DOLLARS (IV) FOR TAX YEARS BEGINNING IN TWO THOUSAND EIGHTEEN AND THEREAFTER: HOUSEHOLD GROSS INCOME MAXIMUM REAL PROPERTY TAX ONE HUNDRED THOUSAND SIX PERCENT OF HOUSEHOLD GROSS DOLLARS OR LESS INCOME MORE THAN ONE HUNDRED THOUSAND SIX PERCENT OF ONE HUNDRED DOLLARS, BUT LESS THAN OR EQUAL TO THOUSAND DOLLARS PLUS SEVEN ONE HUNDRED FIFTY THOUSAND DOLLARS PERCENT OF HOUSEHOLD GROSS INCOME ABOVE ONE HUNDRED THOUSAND DOLLARS MORE THAN ONE HUNDRED FIFTY SIX PERCENT OF ONE HUNDRED THOUSAND THOUSAND DOLLARS, BUT LESS THAN DOLLARS PLUS SEVEN OR EQUAL TO TWO HUNDRED FIFTY PERCENT OF FIFTY THOUSAND DOLLARS THOUSAND DOLLARS PLUS EIGHT AND ONE-HALF PERCENT OF HOUSEHOLD GROSS INCOME ABOVE ONE HUNDRED FIFTY THOUSAND DOLLARS MORE THAN TWO HUNDRED FIFTY NO LIMITATION. THOUSAND DOLLARS (B) THE THRESHOLDS OF HOUSEHOLD GROSS INCOME ESTABLISHED BY CLAUSE (IV) OF SUBPARAGRAPH (A) OF THIS PARAGRAPH SHALL BE INDEXED FOR INFLATION FOR TAX YEARS BEGINNING IN TWO THOUSAND NINETEEN AND THEREAFT- ER. (4) EXCLUSIONS FROM ELIGIBILITY. NO CREDIT SHALL BE GRANTED UNDER THIS SUBSECTION IF THE QUALIFIED TAXPAYER CLAIMS THE REAL PROPERTY TAX CIRCUIT BREAKER CREDIT, PURSUANT TO SUBSECTION (E) OF THIS SECTION, DURING THE TAXABLE YEAR. S 6. This act shall take effect immediately.