“The benefits to older homeowners in the county are nothing short of significant,” Rep. George said of the Taxpayer Relief Act, which was approved Wednesday night on a 137-61 vote in the state House and sent to Gov. Edward G. Rendell for his signature. “The property tax cuts for many working families leave much to be desired.
“I will fight to see that this measure is just the start and not the finish,” said Rep. George, who voted for the measure. “It’s not enough property-tax relief, but enough to justify moving forward after 30 years of deadlock.”
According to estimates by the state Senate, which approved the measure May 2 on a 40-9 vote, the legislation would:
● Enable 2,529 county homeowners to have all school property taxes rebated through the Property Tax and Rent Rebate Program – PTRR – beginning next year.
● More than triple – to 6,395 – the number of county homeowners eligible for PTRR.
● Expand PTRR income eligibility for homeowners to $35,000 from the current $15,000 limit while excluding 50 percent of Social Security and railroad retirement benefits from the calculations.
● Expand the maximum PTRR rebates to $650 for eligible renters and homeowners from the current limit of $500.
“Many of those homeowners most at risk of losing their homes through soaring school property taxes benefit significantly from the legislation,” said Rep. George, who noted that the PTRR program‘s sliding scale of rebates is available to residents over age 65, widow and widowers ages 50 through 64 and permanently disabled people who meet income requirements.
Rep. George said all school districts will receive tax reductions from gaming revenues.
“However, the distribution formula is based on a district’s tax capacity, effort and burden, and homeowners paying well above a district’s average school property tax bill may very well be disappointed in their amount of relief.”
Rep. George said school districts would be required to place a referendum question on the 2007 spring primary election ballot that would ask voters to authorize an increase in local income taxes to provide property tax reductions of at least half of the maximum homestead or farmstead exclusion.
“The property tax reductions afforded by the shift to local income taxes would be buttressed by gaming proceeds once a $400 million reserve is established in several years,” Rep. George said.
The House and Senate projections for local school districts include:
Clearfield Area
Average property tax bill: $703
Property tax savings from shift to local income tax: $191, a 27 percent reduction
Property tax reductions with $400 million of gaming revenue: $285, a 40 percent reduction
Property tax reductions with $750 million of gaming revenue: $366, a 52 percent reduction
Curwensville Area
Average property tax bill: $560
Property tax savings from shift to local income tax: $157, a 28 percent reduction
Property tax reductions with $400 million of gaming revenue: $250, a 45 percent reduction
Property tax reductions with $750 million of gaming revenue: $331, a 59 percent reduction
DuBois Area
Average property tax bill: $997
Property tax savings from shift to local income tax: $278, a 28 percent reduction
Property tax reductions with $400 million of gaming revenue: $403, a 40 percent reduction
Property tax reductions with $750 million of gaming revenue: $511, a 51 percent reduction
Glendale
Average property tax bill: $674
Property tax savings from shift to local income tax: $201, a 30 percent reduction
Property tax reductions with $400 million of gaming revenue: $313, a 46 percent reduction
Property tax reductions with $750 million of gaming revenue: $411, a 61 percent reduction
Harmony Area
Average property tax bill: $409
Property tax savings from shift to local income tax: $127, a 31 percent reduction
Property tax reductions with $400 million of gaming revenue: $196, a 48 percent reduction
Property tax reductions with $750 million of gaming revenue: $256, a 63 percent reduction
Moshannon Valley
Average property tax bill: $561
Property tax savings from shift to local income tax: $166, a 30 percent reduction
Property tax reductions with $400 million of gaming revenue: $257, a 46 percent reduction
Property tax reductions with $750 million of gaming revenue: $337, a 60 percent reduction
Philipsburg-Osceola
Average property tax bill: $714
Property tax savings from shift to local income tax: $221, a 31 percent reduction
Property tax reductions with $400 million of gaming revenue: $326, a 46 percent reduction
Property tax reductions with $750 million of gaming revenue: $418, a 59 percent reduction
Purchase Line
Average property tax bill: $442
Property tax savings from shift to local income tax: $132, a 30 percent reduction
Property tax reductions with $400 million of gaming revenue: $209, a 47 percent reduction
Property tax reductions with $750 million of gaming revenue: $276, a 62 percent reduction
Glendale
Average property tax bill: $674
Property tax savings from shift to local income tax: $201, a 30 percent reduction
Property tax reductions with $400 million of gaming revenue: $313, a 46 percent reduction
Property tax reductions with $750 million of gaming revenue: $411, a 61 percent reduction
West Branch
Average property tax bill: $532
Property tax savings from shift to local income tax: $161, a 30 percent reduction
Property tax reductions with $400 million of gaming revenue: $233, a 44 percent reduction
Property tax reductions with $750 million of gaming revenue: $295, a 55 percent reduction
Rep. George said the 100-page bill provides for installment payments on property taxes and spending controls beginning in 2007. A district would need court approval to increase taxes above an inflation-linked index, with exceptions that include high retirement, special education and construction costs.
Although the bill, which could not be amended, seemingly requires districts to obtain voter approval this year for tax increases exceeding the index, a companion bill is expected soon to adjust it so it does not disrupt already-approved school budgets.
“The back-end referendum has been one of the most contentious points of the debate,” Rep. George said. “However, nothing was going to move without the spending controls, and at one point the exceptions appeared to be at risk.”
Rep. George said other specifics of the bill include:
● School districts may opt out of receiving gaming revenues.
● Voters may reverse a district’s decision to opt out.
● School districts must abide by the spending controls, including the back-end referendum, even if rejecting gaming revenues.
● Districts must appoint a local tax study commission before proposing to authorize an increase in local income taxes.