VALLEY CENTRAL SCHOOL DISTRICT

Transcription

1 VALLEY CENTRAL SCHOOL DISTRICT Presentation to the VCSD Board of Education Veterans Exemption Real Property Tax Law 458-a August 18, 2014

2 REAL PROPERTY TAX LAW (RPTL) 458-A AMENDED The recent amendment to Section 458a enabled school districts to provide eligible veterans with partial exemption from school taxes levied on their property that was previously available only for county and local property taxes. There are five parts to the exemption: War Time Combat Zone Disabled Veterans Surviving Spouses of Veterans Gold Star Parents

3 BASIC WAR EXEMPTION This exemption provides for an exemption of 15% up to a true value of $12,000 of any qualifying residential real property owned by a veteran, spouse of a veteran, or the un-remarried surviving spouse of a veteran and used as their primary residence.

4 COMBAT ZONE EXEMPTION Where a veteran served in a combat zone, he/she may receive an additional exemption of 10% up to a true value of $8,000 of the qualifying residential property. When combined with the Basic War Exemption, the total exemption is 25% up to $20,000 of true value for a combat zone veteran.

5 DISABILITY EXEMPTION If a veteran has received a compensation rating because of a service related disability, he/she may receive an additional exemption, and the percentage varies according to the veteran s disability rating but may not exceed $40,000 of true value of the qualifying property.

6 SPOUSE S EXEMPTION If a veteran dies, their surviving spouse may, under certain circumstances, be entitled to receive their exemption. Is not approved separately from the first three exemptions (this possible exemption is automatically attached to the basic war, combat, and disability exemptions in certain circumstances).

7 GOLD STAR PARENT EXEMPTION This is a separate exemption that the School District can award. If a child of a parent dies in the line of duty, their parent is entitled to the same exemption that they would have been entitled to. Must be voted on and approved separately from the other exemptions.

8 VETERANS EXEMPTION AMENDMENTS The original legislation does not appear to contain a provision allowing municipalities to repeal the exemption. The legislature is in the process of amending the legislation to allow this. This amendment has not yet been passed. An Assembly bill has been introduced which would reimburse school districts for any taxes lost because of the exemption. This would solve the problem of shifting the tax burden to other taxpayers. However, no Senate bill has been introduced to do this, and therefore the legislature has yet to approve this bill. Some districts have chosen to delay considering the Veterans Exemption until these two issues are resolved.

9 HOW DOES THE EXEMPTION WORK? The Exemption Works by Exempting a Portion of the Taxable Value of the Property. So, if a Veteran s house is assessed at $ 200,000, and the Veteran gets a tax exemption of $ 20,000, then only $ 180,000 of the value of the house is taxed. In this example, with a tax rate of $ per $ 1,000 of assessed value, the Veteran would pay $ 3, in taxes with the $ 20,000 exemption, instead of $ 4,226 in taxes that he or she would pay without the exemption.

10 LEVELS OF EXEMPTION There are 11 different levels of exemption that could be granted, one of which is the Statutory Default level set by the Exemption Law and ten that could be set by the Board of Education at the local level. Each level sets a different amount for the three types of exemption (basic war, combat zone, and disability). Most of the school districts that have granted an exemption have done so at the Statutory Default level set by the Exemption Law. To simplify matters, the following information is based only on the calculations for the Statutory Default level set by the Exemption Law.

11 EFFECT ON SCHOOL TAXES This exemption does not change the amount of the school tax levy needed to support the school district budget. It shifts the burden, much like other tax exemptions except STAR, to the other properties within the district, that do not qualify for the exemption. The following slides show the number of estimated exemptions in each town for (the latest year that we have data for) and the effect that granting these exemptions would have on our tax rate.

12 VETERANS EXEMPTIONS BY LEVEL War Combat Disability Crawford Hamptonburgh Montgomery Newburgh New Windsor Shawangunk Walkill TOTAL

13 MAXIMUM TAX IMPACT Total Value of Tax Exemptions: $ 503,668 Projected Additional Tax Rate Per $ 1000 of Taxable Assessed Value for Non-Veterans: 0.34 Projected Maximum Increase in Rate For Non-Veteran Property Tax: 0.93 %

14 SIMPLY PUT SIMPLY PUT: WHAT GRANTING THE VETERANS EXEMPTION WOULD MEAN If You Paid This Amount In : A 2.0 % Increase Would Be: A Veteran with a $ 20,000 Exemption Would Pay: Tax For Non- Veterans: $ 3, $ 3, $ 2, $ 3, $ 6, $ 6, $ 5, $ 6, $ 9, $ 9, $ 8, $ 9,263.70

15 MAXIMUM TAX IMPACT (CONT.) With 1,166 Veteran s Exemptions, the average Veteran s Exemption would result in an average estimated $ tax reduction per veteran. With 10,415 parcels in the district (this includes commercial parcels as well as residential), 9,249 of which are non-veteran properties (10,415 1,166 = 9,249), granting the Veteran s exemption would result in an average estimated tax increase of $ per parcel on non-veteran properties.

16 MAXIMUM TAX IMPACT (CONT.) This 0.93 % maximum increase would be IN ADDITION to any tax increase approved by the voters. So, if the voters approve a 2 % tax increase for , everyone except the Veterans receiving the exemption would have an ACTUAL tax increase of 2.93 % for The Veterans who received the exemption would have a tax increase of LESS THAN 2 % (the amount and percentage would vary depending on the number and type of exemption (s) and the value of the property).

17 SCHOOL DISTRICT PROCEDURE Exemption is not Automatic A School Board is not required to provide an exemption. Public Hearing If a School Board wishes to consider granting an exemption, the School Board must first hold a public hearing prior to adopting a resolution. The Board is not required to hold a public hearing unless it wishes to grant the exemption. Resolution After the public hearing, the School Board may choose to adopt a resolution providing for the exemption. The resolution must be adopted prior to March 1 st in order to be effective for the following school year. When they choose to grant the exemption, the School Board must also choose a level of the exemption to grant.

18 OTHER SCHOOL DISTRICTS IN OU BOCES Exemption Granted: Chester, Goshen, Greenwood Lake, Marlboro, Minisink, Pine Bush, Tuxedo, Warwick, Washingtonville 4 of these districts also granted the Gold Star Exemption Exemption Not Granted: Cornwall, Florida, Highland Falls, Kiryas Joel, Middletown, Monroe-Woodbury, Newburgh, Port Jervis