Veterans Exemption

After voting on the school budget and school board candidates next Tuesday you will be asked to fill out an exit poll with a focus on whether you would favor the Lansing School District's adoption of a veteran's exemption on school taxes.  This 'straw poll' is in response to retired career military medevac pilot and Lansing resident Bill Howard's request last January that the Board Of Education adopt district give veterans a break on their taxes, arguing that service men and women and their families make huge sacrifices to protect and defend our country.  School Business Administrator Mary June King researched the issue, and the result is an attempt to sound out the district public on whether they are willing to pay more so veterans can pay less.

"In the last straw poll we did in 2014, when it first came out that school districts could opt into this exemption, the vast majority of people who took the straw poll didn't know anything about it," King explained to the Board Of Education.  "So this is an opportunity to educate our community on this topic.  This doesn't impact the property tax cap, nor does it impact the property tax levy.  If you say we need an $18 million levy we're still going to collect $18 million, and if that falls under the property tax cap you're still good.  What this impacts is who you're collecting that levy from."

Therein lies the rub: not offering an exemption makes the school board look unpatriotic.  But offering the exemption forces other taxpayers to pay more of what is already an expensive tax burden.  At a January school board meeting Board President Christine Iacobucci said the board should consider Howard's request in light of all the needs and pressures on next year's budget.  She thanked Howard for his service on behalf of the Board, but also said that there are many Lansing people in need, as well as other pressures on next year's budget.  What turned out to be a $25 million devaluation of the Cayuga Power Plant this year with more loss in value to come in the next two years was on everyone's mind.  But King noted that the tax climate changes from year to year, and recommended that the Board consider the veterans' exemption annually.

"This year the taxpayers are already getting a shift of $25 million of value," King says.  "That's where an annual consideration of this is very relevant, particularly here in Lansing.  There may be years where you decide that you just can't afford to do that to folks, because they're already taking it from some other suggestion."

The New York State School Boards Association conducted a poll of 436 school superintendents in 2014.  76% percent said they had not voted on adopting the exemptions, 16% replied that their districts had adopted them, and 8% said their districts had voted to adopt them.  The only school district in Tompkins County that currently offers the exemption is Trumansburg.  many school officials across the state complain that it is unfair to ask school districts to determine whether or not to extend tax exemptions to veterans because school budgets are the only taxing authority budgets that must be approved by the public. 

"Why is the State putting this in our lap?," King asked the Board Of Education last month.  "If they think this is a valuable inception why aren't they putting it out there?  The only jurisdiction for which the public votes on its budget - they're making that jurisdiction make this decision.  That seems to put you in a very difficult spot."

The veteran's exemption law was modified in 2013 to allow school districts to offer a partial exemption to private, primary residences owned by veterans, a veteran's spouse, or an un-remarried widow or widower of a veteran.  Veterans are defined as having served in a war or hostilities, including the Spanish American War, World Wars I and II, Korea, Vietnam, or the Persian Gulf.

Various exemptions may be granted to non-combatant veterans (15% of assessed value), those who served in a combat zone (25% of assessed value), and disabled veterans (up to 50% of assessed value), subject to a cap determined by each individual taxing authority.  The State maximums are $12,000 fr wartime, $20,000 for combat zone, and $40,000 for disabled veterans.  Communities may decide to go higher or lower.  The Trumansburg schools opted to accept the basic State maximums, while the Town and Village of Lansing offer higher maximums: $15,000/$25,000/$50,000.  If Lansing decides to adopt the exemption, 242 properties are estimated to be eligible.

"If we had adopted this a year ago and had taken the lowest exemption scale of $6,000/$9,000/$20,000, the total taxable value lost would have been $2 million," King said.  "That's not taxable value lost to the district -- that' taxable value that's going to be shifted to the other taxpayers."

In that scenario non-veteran taxpayers would make up close to $44,000, for a tax rate increase of six cents.  If your home is worth $191,000 (the median value of Lansing homes) you would pay an additional $10.88.  If the $9,000/$15,000/$30,000 scenario $64,565 would be shifted to non-veterans, adding eight cents to the tax rate and the same homeowner would pay an additional $15.61.  If the school district opted for the higher, $15,000/$25,000/$50,000 exemption, $84,621 would be shifted to non veterans, adding a dime to the tax rate and an additional $20.24 to that $191,000 homeowner.

"All of the exemptions are just a tax shift," King said.  "The clergy is exempted, that's mandated.  Their property is still there, so we're just shifting that tax rate over to somebody else."

The Board Of Education may opt in or out, or change the cap rates each year if it wishes, but must do so by March 1st of the year the tax will apply.  That means that if the Lansing board decided to grant the exemption it wouldn't apply until next year.  If they decide to use caps higher or lower than the State caps a public hearing is required.  If the exemptions are adopted, they are not just automatically applied to veterans' tax bills.  Individual taxpayers who qualify must apply for the exemption.

The exit poll will be used to guide the Board Of Education's decision, if they choose to consider to adopt the exemption for the 2018-19 budget, and school officials promise a public hearing before voting yea or nay.

King suggested that the Board consider all tax exemptions Lansing schools offer, including the veteran's exemption, every year.

"That way these things don't get lost in the shuffle, and you don't have a community member who thinks that they're being ignored or not being considered," she said.