Beginning with 2011-12 school tax bills, the savings resulting from the Basic or Enhanced STAR exemptions are limited to a 2% increase over the prior year.
The maximum STAR savings for each school district is calculated by the Office of Real Property Tax Services (ORPTS) and available online.
When school districts initially calculate their tax bills, for each municipal segment they will compare the amount of STAR savings to the maximum. If the STAR savings exceed the maximum, the school district will use the maximum when calculating tax bills for that segment. For example:
In Town X in School District Y:
- School tax rate * Basic STAR exemption = $630
- ORPTS established a maximum for the Town X segment of $600
- The lower of these two figures is the prior year savings amount on which current year maximum savings amounts are based. (In this example, the amount established by ORPTS is the lower figure.)
- ORPTS establishes a maximum for the Town X segment of $612 (600 * 1.02)
- If the school tax rate * Basic STAR exemption is less than or equal to $612, the STAR savings and taxes due are computed the same as in prior years
- If the school tax rate * Basic STAR exemption is greater than $612, the maximum savings per exemption is $612
Information on your school tax bill
The amount of your STAR savings will continue to be displayed on your school property tax bill (Understanding Your Property Tax Bill). However, because the limit is on the STAR savings (rather than the exemption amount), your savings and exemption may not be directly reflective of each other.
In the past, you could calculate your STAR savings by multiplying your STAR exemption by the school tax rate (both of which are available on your tax bill). Where the limit is reached, that calculation will no longer yield your savings.
School district reimbursement
The Basic and Enhanced STAR exemptions are the only property tax exemptions funded by New York State. School districts are directly reimbursed for the savings taxpayers receive. The 2% STAR savings limit does not negatively impact school districts; under the new law they will continue to be reimbursed for the cost of the exemption.