Review of Veterans Exemption Impact on School Districts

Gates Chili Central School District Review of Veteran s Exemption September 25, 2018

Outline of Presentation Exemption Categories The Alternative Veteran s Exemption for School Districts Tax Levy, Assessments and Tax Rates Board Legal Authority and Limitations Decision Points and Related Tax Impacts Recommendations

Exemption Categories Subsidized Exemptions Revenue loss from exemptions are reimbursed to the District. Subsidized exemptions do not require increases in tax rates Examples: STAR taxpayers receive reduction in their school tax bills which are reimbursed by the State PILOT businesses receive tax exemption on new construction and make payments in lieu of taxes (PILOT s) Socialized Exemptions Special exemptions are granted to targeted subgroups of the population, resulting in a reduced tax base. Higher tax rates are required to produce the same revenues from the smaller tax base Examples: Aged Exemption low income senior citizens receive up to a 50% reduction in their assessment Veteran s Exemption qualifying veterans receive a 15% reduction in their assessment, up to a specified limit

The Alternative Veterans Exemption Defined Provides for a 15% reduction in assessment for wartime veterans, subject to local municipal maximum benefit Wartime veterans who served in combat zones may receive an additional 10% reduction, also subject to local municipal maximum benefit Veterans with a service related disability may receive an additional reduction equal to 50% of their veteran s disability rating, also subject to local municipal maximum benefit Municipalities offering the wartime veteran exemption may also extend it to Cold War veterans

Alternative Veterans Exemption Impact on School Districts Prior to 2013, the Veteran s Exemption was not available to school district property taxes Chapter 518 of the Laws of 2013 gave local school districts the option to adopt the alternative veteran s exemption, including the additional exemptions for combat zone and disability As a socialized exemption, adoption would result in a reduced tax base, causing tax rates to rise to continue to collect the same levy School districts throughout the State studied the issue in 2014, with less than 33% of districts adopting the exemption In Monroe County, none of the 17 suburban districts have adopted the exemption

Alternative Veterans Exemption Gates Chili History The Gates Chili Board of Education studied the issue in 2015, and found that the exemption would remove $19.5 million in assessed value from the tax rolls, resulting in a tax rate increase of 1.1%. A public hearing was held on February 10, 2015 The Board of Education voted 6 -2 to reject adoption of the exemption, consistent with all of the other suburban Monroe County school districts.

Tax Levy, Assessment and Tax Rates Tax Levy The total amount of taxes to be collected by a municipality Taxable Assessment The total assessed value of all properties in a municipality, net of exemptions Tax Rate The rate required to be imposed on all taxable assessments to collect the tax levy Board approved 2018-19 tax levy of $52,933,230 Tax Levy Total 2018-19 taxable assessments of $2,008,851,720 Taxable Assessments 2018-19 Tax necessary to collect the levy is $26.35 Tax Rate

Board Legal Authority and Limitations Summary of Taxpayer Proposal: Hold a public vote for the taxpayers of the Gates Chili Central School District to consider adoption only the Disabled Veterans portion of the Alternative Veteran s Exemption Issues with Taxpayer Proposal: Board of Education has authority to adopt exemptions without voter approval; numerous Commissioner s Appeal decisions have advised districts not to hold advisory votes on matters not requiring voter approval District legal counsel has advised that since the statutory language authorizing the disabled veteran s exemption {RPTL Section 458-a(2)(c)}, it cannot be adopted independent of the Alternative Veteran s Exemption {RPTL Section 458-a(2)(a)

Tax Impacts of Exemption Options Lowest Allowable Maximum Exemptions Highest Allowable Maximum Exemptions Veteran s Exemption Category Wartime Optional Additions to Wartime Exemption: Combat Zone Disabled Cold War Totals Total Loss of Assessed Value Resulting % Increase in Tax Rate Veteran s Exemption Category Wartime Optional Additions to Wartime Exemption: Combat Zone Disabled Cold War Totals Total Loss of Assessed Value Resulting % Increase in Tax Rate $7,584,000 0.4% $23,034,240 1.2% $2,200,000 $3,820,000 $546,000 $14,150,000 0.1% 0.2% 0.0% 0.7% $6,689,670 $12,275,200 $1,569,540 $43,568,650 0.3% 0.6% 0.1% 2.2%

Increases in 2018-19 Tax Rates and Bills Minimum Exemption Tax Rate $.10 Mid-Exemption (County) Tax Rate $.17 Maximum Exemption Tax Rate $.30 Tax Bill* Tax Bill* Tax Bill* Wartime Optional Additions to Wartime Exemption: Combat Disabled Cold War Total *Based on a home taxed at $120,000, net of STAR exemptions $12 $21 $36 $.03 $.05 $.01 $.19 $3 $6 $1 $.22 $.08 $.01 $.48 $26 $10 $1 $58 $.09 $.16 $.02 $.57 $11 $19 $3 $69 $22

Veterans Tax Exemption Decision Points Extend Exemption to Cold War Veterans? No Adopt Alternative Veteran s Exemption? Adopt Additional War Zone Exemption? Adopt Additional Service Disability Exemption? Adopt Section 458- a(2)(a), (b) & (c) & 458-b of Real Property Tax Law Yes Yes Yes Yes No No No Adopt Section 458-a(2)(a) of Real Property Tax Law Adopt Section 458- a(2)(a), (b) & (c) of Real Property Tax Law Adopt Section 458- a(2)(a) & (b) of Real Property Tax Law No Action Needed Establish Maximum Allowable Exemptions Wartime (and) Cold War Veterans $6,000 $9,000 $12,000 $15,000 $18,000 $21,000 $24,000 $27,000 $30,000 $33,000 $36,000 $39,000 $42,000 $45,000 War Zone $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 $22,000 $24,000 $26,000 $28,000 $30,000 Disability $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000 $130,000 $140,000 $150,000

Recommendations As much as the District would welcome an opportunity to provide a financial benefit to our disabled veterans, we lack the legal authority to only adopt the disabled veterans addition to the Alternative Veteran s Exemption. Consequently, the District s only options are to adopt the Alternative Veteran s Exemption, or take no action. The increase in tax rate associated with the exemption, which was the reason it was not adopted in 2015, continues to present too great a barrier to recommend the adoption of the Alternative Veteran s Exemption.