Res. No. 797

Resolution calling on the New York State Legislature to pass, and the Governor to sign, S.2238, which would amend the tax law to phase out the school tax reduction credit for higher earners and implement a progressive child tax credit.

By Council Members Williams, Avilés and Brooks-Powers

Whereas, The New York State (NYS) School Tax Relief (STAR) program provides a real property tax credit or exemption to income-eligible homeowners; and

Whereas, In providing real property owners a tax break, the STAR program shifts part of the local tax burden for schools from school districts to NYS, as schools are funded in most areas of the state from real property taxes levied directly by a local board of education (BOE) or, as in New York City, by the municipal government; and

Whereas, NYS reimburses New York City for its loss of real property tax revenue attributable to STAR out of a school tax relief fund, which is funded directly from NYS personal income tax revenues; and

Whereas, Despite its well-intended objectives, the STAR program is an insufficient means of shifting the financial burden of public education from and among New York City taxpayers; and

Whereas, Homeownership rates are lower in New York City in contrast to other NYS local governments, and the STAR program functions by giving homeowners a tax break; and

Whereas, Thus, non-homeowners who pay taxes in New York City do not receive direct relief from the existing STAR program despite contributing to local educational spending through City personal income tax (PIT); and

Whereas, The NYS legislature has implemented additional relief for New York City taxpayers through the New York City school tax credit (STC), which reduces the amount of PIT that individual taxpayers owe to the City; and

Whereas, Similar to the STAR program, under STC, NYS reimburses New York City for foregone PIT revenue; and

Whereas, To provide additional tax relief for low income residents, NYS Senator Andrew Gounardes introduced S.2238, which is now pending in the New York State Senate; and

Whereas, S.2238 would repeal the STC above certain taxable income thresholds and redirect this NYS spending to a New York City child tax credit (CTC); and

Whereas, Pursuant to S.2238, a tax credit of $300 per child, up to certain income thresholds, would be codified; and

Whereas, The proposed child tax credit against PIT would give a tax break to the New York City families who need it most while minimizing any additional costs to NYS; now, therefore, be it

Resolved, That the Council of the City of New York calls on the New York State Legislature to pass, and the Governor to sign, S.2238, which would amend the tax law to phase out the school tax reduction credit for higher earners and implement a progressive child tax credit.

LS#18834

2/18/25

BS