While most of the money the state spends on schools is distributed in a way that helps to equalize how much goes to rich and poor areas, a $2.5 billion piece of it goes predominantly to affluent areas: the STAR program.

STAR — School Tax Relief — first adopted in 1997, has sent more than $11 billion to school districts to make up for tax breaks they give to homeowners — but not renters or businesses. About 3 million homeowners benefited this year.

Because the suburbs have a far higher preponderance of homeowners than cities and because property values tend to be higher there, the money goes predominantly to people in those communities. There are no income limits for the rebates, except for people over 65, who get an additional break if they earn $64,650 or less a year.

"STAR is a way to get money to New York City suburbs that you never could through the school-aid formula," said Frank Mauro of the Fiscal Policy Institute, a labor-backed think tank. "It's not based on need or ability to pay, but on the number of owner-occupied dwellings and how expensive the average home is."

The program has been effective at driving state money to those areas.

Last year, for example, nearly $326 million of STAR funds went to Suffolk County homeowners, well more than twice as much as the $137 million New York City taxpayers got. Suffolk has about 1.4 million people, New York City about 8 million.

Homeowners in the two other large suburban counties, Nassau ($311 million in STAR aid, about 1.3 million people) and Westchester ($285 million, about 925,000 people), also got far more than those in the city.

Buffalo's Erie County ($131 million from STAR), the largest upstate county with about 950,000 people, got almost as much as New York City, while Rochester's Monroe County ($129 million and about 735,000 people) was not far behind.

Within those counties, affluent suburbs with expensive homes got far more per person than the central cities.

To partly make up for the small number of owner-occupied homes in New York City (about 70 percent of New York City residents rent their homes, while about 70 percent of people in the rest of the state own homes), STAR gives New York City residents a partial break on their state income taxes, but it falls far short of making up the difference.

"Distribution of STAR hurts places without a lot of owner-occupied homes," Mauro said. "New York City doesn't do well, and neither do Buffalo, Rochester and Syracuse, and they don't even get the income-tax break the city (New York) gets."

But the program wasn't designed as another aid program for schools — it was established to lower the property-tax burden to those who are paying the most, said state School Boards Association spokesman David Ernst.

"The idea of STAR was not to be a supplemental-aid program for schools, but a tax-relief program. It has been effective at delivering that,'' he said.

But it hasn't delivered that for businesses in the state, which don't qualify for the breaks, said Robert Ward of the state Business Council.

"STAR subsidizes higher education spending and thus drives up tax rates," Ward said. "School districts have taken the STAR dollars and driven them into above-inflation budget increases, in most cases twice the rate of inflation. That's why we continually see property taxes going up and up.''

But the program has helped equalize what many people in the suburbs see as the unfair burden they bear: both higher income taxes that pay for state spending in other areas and high property taxes to fund high-quality schools.

"The STAR program has worked effectively to reduce the burden of property taxes,'' said Sen. Nicholas Spano, R-Yonkers. "Because of some of the peculiar ways the school-aid formula works, school districts in Westchester that are very often treated well by the education formula are getting a benefit on the flip side for the STAR program.''

"STAR is one of the only benefits our residents get for putting so much of their heart and soul, as well as their resources, into our schools,'' said Assemblywoman Amy Paulin, D-Scarsdale, who added that the quality of the suburban schools might slip if STAR aid were removed.

Shifting STAR aid to badly pressed urban schools should be considered only if all other options fail, said an influential Manhattan lawmaker.

"That would be a point of last resort,'' said Assembly Education Committee chairman Steven Sanders, D-Manhattan. "We haven't reached that point. I think it (funding urban schools adequately) can be done without intruding on STAR."

© 2004, Gannett News Service