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Thursday, March 6, 2014

The Alternative Veterans Exemption

The Alternative Veterans Exemption is among the new laws that recently introduced in New York State. This amendment to the existing Real Property Tax Law "grants school districts the authority to exempt a portion of the taxable assessed value of the primary residence of certain veterans. The exemption provides a reduction in the assessed value of a qualifying property, dependent on the nature of the veteran's service and the local law adopted by the school district." (the language is copied from a document provided by our legal counsel clarifying the law). County, city, town and village governments had already been faced with this decision years before and it was now being extended to school districts.

While there are a few other qualifiers and options, the thrust of the legislation offers the school Board of Education the opportunity to act on the proposal, either rejecting, affirming, or rejecting the issue with a plan for future discussion. The exemption involves a 15% exemption, not to exceed $12,000 (or the product of $12,000 multiplied by the latest state equalization rate for the assessing unit) to qualifying veterans (i.e. veterans who were on active duty during a period of war). Veterans who served in combat zones may receive an additional 10%, not to exceed $8,000. veterans that sustained service related disabilities are also eligible for a percentage exemption equal to one-half of their disability rating received by the Veterans Administration or the Department of Defense, up to $40,000.

This was a peculiarly challenging issue. On one hand, denial of the exemption by any school board could very well be perceived by their constituents as un-patriotic at a time when men and women in the American armed forces remain in harms way across the globe. On the other hand, approving the exemption would subsequently displace whatever amount that was exempted onto the shoulders of those local taxpayers who are not exempted. In other words, since the tax levy would remain the same, the amount decreased by the veterans exemption would be transferred as a commensurate increase for all other taxpayers in the school district - at a time when schools across the state continue to face economic peril exacerbated by the Governor's proposal to sustain the withholding of promised aid to public schools in the form of the infamous, Gap Elimination Adjustment. So, any increase would rest on top of the tax bills of those taxpayers who will be asked to vote on any additional school budget increase on the May 20th annual budget vote. That's certainly a risk that districts would be flirting with in May as their operating budgets unfold for voters.

Informal surveys revealed that the vast majority of school boards opted to deny the exemption with qualifiers and an intent to review the proposal after they've had more time to analyze the potential financial effects. That is a difficult task when any district serves several towns or villages within the borders of the school district, especially since the towns may not have been consistent in their respective votes on the exemption themselves.

I recommended that our Board of Education approve the exemption and include the provision accommodating "Gold Star parents" (parents who have lost a son or daughter in the line of duty). My recommendation was based on our estimation of the impact, which would amount to a 1.1% exemption that would be transferred to all those taxpayers not qualifying for the exemption. Yes, it would be an increase for non-exempt taxpayers on top of whatever increase we project for our budget for the 2014-15 school year. Yes, that increase could therefore endanger our ability to secure an affirmative vote by the public on May 20th, which would place our district in an extremely difficult position. That would be a risk, but isn't every member of our armed forces taking a bigger risk when they serve in our defense in a combat zone? Visit a Veterans Administration hospital or speak with a Gold Star parent and ask them.

The proposal was unanimously adopted by our Board. I cannot speak for the individual Board members but I can explain why I recommended the exemption. We have the ability to vote on our school budgets, political representatives and many other issues, and the freedom to express ourselves and enjoy the benefits of a great democracy because of the sacrifices men and women in uniform have made to preserve these rights and more. It's been said that 1% of our population serves to protect the freedoms of the other 99%. I don't want to think or believe that our school budget will be defeated because the majority of voters are upset or unwilling to bear the 1.1% cost of those who have served during time of war - and those veterans who have paid significant or ultimate costs in body and spirit.

We'll see on May 20th.

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