Property Tax Reform/Gaming

The average Pennsylvania homeowner will save approximately $190 in 2008 as we cut local taxes by $786 million, including $612.9 million in direct reduction to school property tax bills and wage tax relief, plus extra help for the senior citizens who need it the most. This tax relief is the result of gaming revenue generated by the seven operating gaming facilities in the state.

This is a major victory for Pennsylvanians who have fought for decades to have their property taxes cut.

When all 14 gaming facilities are up and running, the average amount of property tax relief for each homeowner is expected to rise to $300.

Pennsylvania seniors will get the most significant property tax relief through an expansion of the state's Property Tax/Rent Rebate program. Eligible senior citizens can benefit from this general property tax relief and the state’s Property Tax/Rent Rebate program. For approximately 113,000 senior households taking advantage of both programs, school property taxes were eliminated in 2008.

Nearly 600,000 senior citizens began receiving gaming-funded property tax relief in 2007 through the expanded Property Tax/Rent Rebate program Governor Rendell signed in 2006.
 

Highlights of the Taxpayer Relief Act (Act 1)

Fast property tax relief — The Taxpayer Relief Act Governor Rendell signed in June 2006 provides fastest relief for Pennsylvania's senior citizens — who are on fixed incomes and need the most immediate tax relief. 

Greater taxpayer control over future school tax increases in every school district — There is no state-imposed income tax shift that would require districts to raise the earned income tax (EIT) to qualify for state-funded tax relief. Now, every school district will be able to receive tax relief from the state - without any mandate to raise local taxes. The act leaves the decision to shift to income taxes up to local voters, with no strings attached.

The act gives taxpayers in every school district a greater voice in proposed tax increases. School boards will still be able to raise property taxes each year to keep up with inflation - and even more in many communities - but sensible and fair voter controls mean that taxpayers will now have a direct say in the most extreme tax increases.

More flexible referendum exceptions — The new law wisely expands the exceptions for special education, health care costs and pension obligations. The 10 exceptions that school boards could seek in order to raise taxes faster than inflation because of emergencies or educational necessities are maintained - and they add greater flexibility where school districts need it the most.

New ability to combat high wage taxes — Act 1 gives Scranton the power to use up to half of its state allocation from gaming to reduce its wage tax, which is the second highest in the state. The law also maintains Philadelphia's historic wage tax relief, which, when combined with the city's own mandated tax reductions, will bring the wage tax below 4 percent for city residents starting in 2009. Because cities with high wage taxes will be unlikely to ever make a shift to increase their earned income taxes to fund property tax relief, senior citizens in Pittsburgh, Philadelphia and Scranton who earn up to $30,000 a year will have their property tax rebate increased by an additional 50 percent.

For a list of estimated 2008-09 property tax relief in each Pennsylvania school district, click here.

Race Horse Development and Gaming Act

Property tax relief is made possible by the expansion of gaming in the commonwealth, which includes:

• Slot machines at 14 venues — seven of which are tracks, five are non-track parlors, and two are resort-based locations.
• Slots licensees pay 34 percent of their gross revenue to the state, with most proceeds going to the property-tax relief fund. The remaining funds also aid the horseracing industry and local communities that host slots facilities, and create a state program to prevent and treat compulsive gambling.
• Track and non-track licensees pay a $50 million fee up front to operate slots while resort licensees pay a $5 million fee.
• The Pennsylvania Gaming Board Control Board regulates gaming in Pennsylvania. The state Department of Revenue uses a central computer system to monitor slots operations across the state to ensure their integrity.
• To find out more, visit the Pennsylvania Gaming Control Board.

For more information about the property tax relief plan, go to www.PaPropertyTaxRelief.com.