New York's STAR Program

The STAR (School Tax Relief) program was enacted by the state legislature in 1997 in response to the increasing magnitude of the property tax, its visibility and accelerated growth. Part of the STAR legislation was a cap on school spending. The cap was never enacted. Thus, school spending continued to expand and STAR's effectiveness was quickly outpaced by school tax levies which are growing faster than inflation since 2000. School tax levies are increasing at an average annual rate of 7.3%, significantly outpacing inflation even after accounting for STAR.

• STAR Program exempts the first $30,000 of every – rich, middle income and poor alike – homeowner’s property value ($50,000 for lower-income seniors). That foregone local revenue is reimbursed to the school district by the State.**
• Of the STAR dollars, 42% go to the 3 wealthiest counties in New York State – Westchester, Nassau and Suffolk.**
• STAR was originally proposed with an accompanying school district spending cap, which was not enacted.**
• During the last several years, New York State funding of public schools (as a percent of total school budgets) has hit a 50-year low.**
• New York State income tax cuts enacted since 1994 will reduce state revenues (from which school aid is drawn) by almost $16 billion in 2006-2007.**
• Federal aid to education dropped from 16% to 4% in the past 20 years.**

The Office of the State Comptroller included an analysis of STAR in this report on property taxes (see pages 12 to 13).