HARRISBURG – Gov. Edward G. Rendell today reminded all Pennsylvania homeowners to sign up by March 1 to qualify for property tax relief. The Governor’s 2007-08 proposed budget includes a new sales tax plan that would deliver $900 million in immediate property tax relief for all homeowners this summer.
“Pennsylvania’s homeowners deserve broad and immediate property tax relief,” said Rendell. “We can provide more than $900 million in relief this summer if the Legislature adopts my plan to dedicate a portion of the revenue generated by a sales tax increase to cut property taxes.”
Gaming is generating 60 percent more revenue for property tax relief than was originally projected. If that performance continues, an additional $700 million could be generated this year. By mid February, after operating for less than 90 days, Pennsylvania’s slot parlors had already surpassed $1 billion in wagers. Despite this positive news, broad-based property tax relief averaging $186 for every homeowner will only be possible if the Legislature adopts the Governor’s sales tax plan.
Homeowners who had not yet signed up for property tax relief under Act 1 should have received a “homestead exclusion application” in the mail in early January. Homeowners will need to complete and mail the form to be eligible for state-funded property tax relief. Anyone whose homestead exclusion application has been approved within the past three years does not need to submit another application. Homeowners who have not yet received a homestead exclusion application should contact their school district’s business office.
Rendell signed Pennsylvania’s landmark property tax relief law – Special Session Act 1 of 2006 – on June 27, 2006, marking the largest property tax cut in the commonwealth’s history: $1 billion annually. Act 1 provides school districts with the flexibility to keep up with inflation, as well as unavoidable and essential costs, while giving voters a greater voice about extraordinary tax increases. Act 1 also gives districts the option to deliver property tax relief by increasing, or implementing, a local earned income tax or personal income tax.
Under Act 1, school districts were required to decide between two options for their 2007-08 budgets by Jan. 25. They could either:
Raise taxes above the local inflation rate for 2007-08 and prepare a preliminary budget by Jan. 25, nearly six months before the traditional June deadline. (The earlier budgeting requirement provides taxpayers with ample time to inspect a school district’s proposed budget before voting on the proposed tax increase in the spring 2007 referendum, if necessary); or
Opt not to raise taxes above the inflation index for the upcoming budget year. This option allows school districts to use the standard budget timeline if they can show that any tax increase will stay within inflation.
By allowing school districts to reduce local property taxes and shift to a local income tax, Act 1 also gives voters unprecedented control in determining the best local revenue to use to fund their schools.
The Taxpayer Relief Act provides special support for senior citizens on fixed incomes through the state rebate program. This year alone, the law will provide an additional $200 million in additional and increased property tax rebates for nearly 600,000 seniors with incomes under $35,000. The increase in the maximum income limit for rebates excludes half of Social Security income. If the Legislature approves the Governor’s plan for expedited property tax relief, senior citizens will receive an additional $58 million in rebates this summer – as well as their share of the $660 million that will be available for all Pennsylvania homeowners.