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Volume 10 - Opinions of Counsel SBRPS No. 59

Opinions of Counsel index

Exemptions-generally; senior citizens exemption; school tax relief [STAR] exemption (scope) (library appropriation) - Education Law, § 259; Real Property Tax Law, §§ 425, 467:

The STAR exemption does not apply to taxes or charges levied for library purposes.

Our opinion has been requested concerning the scope of the STAR exemption (Real Property Tax Law, § 425) as it pertains to a library tax. A certain school district’s voters are deciding whether to finance the library through a separate library tax.

In 7 Op.Counsel SBEA No. 92, a 1981 opinion, we concluded that, where school district voters establish a library pursuant to section 255 of the Education Law, and taxes are therefore voted on pursuant to section 259 of that law, {1} senior citizens exemptions (Real Property Tax Law, § 467) authorized by the school district apply to such tax. We noted that although section 259 of the Education Law provides that the library appropriation is separate from the school district appropriation and is voted on separately from the school tax budget, the library monies are levied and collected as other general school taxes. {2}  We also noted, however, that where a public library district is established and that library is financed by a special ad valorem levy, the senior citizens exemption does not apply, because the scope of that exemption does not include special district charges (RPTL, §§ 467(1)(a), 102(20)).

Chapter 7 of the Laws of 1990 thereafter amended sections 1324 and 1322 of the RPTL (pertaining respectively to the collecting officer’s notice in city and non-city school districts) to provide “that where the school district has levied a tax for purposes of a public library established pursuant to [Education Law, § 255] or has levied a tax on behalf of a library district pursuant to special act, the amount of the taxes attributable to library purposes shall be separately stated on each statement of taxes.” The sponsor’s memorandum in support of the bill states that the amendment was necessary because:

Often, the amount of the school district tax is misinterpreted by taxpayers because the library tax has been added. Similar to Sections 920 and 922 of the Real Property Tax Law for towns, which stipulate that an explanation of the computation of the tax rate shall be enclosed with the statement showing the amount of tax due, this legislation would specify that the library and school district tax rates be separated on the tax bill. Distinct listing of the two rates would clarify that they are the result of separate budgets (1990 New York State Legislative Annual, p. 3).

It seems clear that the intention of this legislation was to distinguish for potential voters the amount of monies necessary for library purposes from those needed for school purposes. There is absolutely no indication that the amendment was intended to affect school tax exemptions.

In Greater Poughkeepsie Library v. Poughkeepsie, 81 N.Y.2d 574, 618 N.E.2d 127, 601 N.Y.S.2d 94 (1993), the Court of Appeals discussed the financing of libraries:

The general statutes do not provide for the creation of library districts - libraries are generally created and funded by municipal corporations under the Education Law (Education Law, §§ 255, 256). In recent decades, however, several special library districts have been created, either to limit support of a library to one part of a town or school district (see, e.g., L.1975, ch. 593), or to expand support to more than one municipality (see, e.g., L.1992, ch.456). There are currently 26 such districts . . . (81 N.Y.2d at 582, 601 N.Y.S.2d at 98).

This statutory amendment and judicial construction which occurred subsequent to our aforecited opinion do not cause us to reach a different conclusion as to the general scope of real property tax exemptions affecting library taxes levied pursuant to section 259. That is, in our opinion, if a municipality (e.g., school district) establishes a library and finances that library through its general tax, most exemptions applicable to that municipality’s taxes (e.g., RPTL, §§ 467, 485-b) apply to the library tax.

We make an exception, however, for the new school tax relief (STAR) exemption which provides an “exempt[ion] for school purposes” only (RPTL, § 425(1)). Indeed, in an April 6, 1998 joint memorandum from this agency and the State Education Department to school business officials, we advised that, “The STAR exemption applies only to the school tax rate and not to any library tax levy or rate. . . . There will be no STAR payments for any library levy” (p.3; emphasis in original). Our rationale for that conclusion is expressed elsewhere on that same page:

The STAR exemption is the only exemption that is funded by the State. Other exemptions result in a reduction in the school taxable value and a corresponding increase in the tax rate, thus redistributing the tax burden from exemption recipients to other taxpayers. The effect of the STAR Program is that New York State will pay the taxes on a portion of the school taxable value for each parcel that qualifies.

Given that at least some libraries are funded through taxes or special district charges other than the school tax, it would be inequitable for the State to pay more tax monies to those school districts which happen to levy the library tax than to those school districts which do not. Accordingly, in our opinion, the STAR exemption does not apply to taxes or charges levied for library purposes.

May 6, 1998

{1}  “Taxes may be voted for library purposes by any school district, municipality, or other body authorized to collect taxes” (75 N.Y. Jur.2d, Libraries, § 13; see also, id., §§ 24, 25).

{2}  The Comptroller reached a similar conclusion (regarding administrative and judicial refunds of taxes) in Opinion 95-15.