Pennsylvania Budget Secretary Certifies $772.5 Million for Statewide Property Tax Relief

HARRISBURG, Pa., April 15 /PRNewswire-USNewswire/ -- Budget Secretary Mary Soderberg today certified that $772.5 million in gaming revenue will be available for property tax relief in 2010 – the third year of broad-based property tax relief under the historic Taxpayer Relief Act.

"We are continuing to provide statewide property tax relief," Soderberg said. "This is welcome news for Pennsylvanians who are still coping with the effects of the prolonged national recession."

The 2006 Taxpayer Relief Act established the Property Tax Relief Fund as a way to use gaming revenues to reduce property taxes for homeowners. State law requires the budget secretary to certify the actual balance in the fund on April 15 of each year and to project gaming revenues coming into the fund in the next six months.

Soderberg certified today that the balance in the Property Tax Relief Fund is $418.1 million, including $83 million in the Property Tax Relief Reserve Fund. Gaming revenue from now through Oct. 15 is projected to add $367.7 million to the relief fund, bringing the total amount in the fund to approximately $785.8 million (including the reserve fund).

Nearly 2.7 million Pennsylvania households saw their property taxes lowered in 2009 because of gaming revenues. The average statewide property tax reduction for each household is expected to be nearly $200 this year. Final figures will be provided in early May, when counties report the number of homeowners who have signed up for their share of property tax relief. School districts will receive their share of property tax relief in two equal installments in August and October.

Homeowners in 66 counties will receive reductions in the school property tax bills they will receive this summer. Philadelphia's share of funding for broad-based tax relief – $85.9 million in the coming year – will be used to reduce the city's wage tax instead of its property tax, since the wage tax is the greater barrier to economic growth in that city.

Older Pennsylvanians in particular will benefit from the commonwealth's use of gaming revenues to provide property tax relief. Nearly 600,000 older people will be eligible for additional relief through the state's Property Tax/Rent Rebate Program. Approximately 123,000 older adults will pay no school property taxes again this year, thanks to state-funded property tax relief. Many more will receive rebates in addition to the property tax relief that all homeowners receive.

"Taking into account the funding for the enhanced Property Tax/Rent Rebate program, we have been able to provide $2.4 billion in total property tax relief since 2006," Soderberg said. "This relief is especially meaningful to older Pennsylvanians on fixed incomes."  

The 2006 Taxpayer Relief Act dramatically expanded the Property Tax/Rent Rebate Program. Before the expansion, approximately 310,000 older Pennsylvanians benefited from the program. Under the Property Tax/Rent Rebate Program, older and disabled homeowners with incomes up to $35,000 are eligible for rebates of up to $650. Older and disabled homeowners with limited incomes who pay a large share of their income in property taxes or who live in high property-tax areas are eligible for additional rebates of up to $325. Those eligible have until June 30 to apply for the program. Information is available at www.PAPropertyTaxRelief.com or by calling 1-888-222-9190.

Soderberg today notified Secretary of Education Gerald Zahorchak by letter of the results of her certification. The amount of property tax relief will vary by school district, and the Department of Education will notify each school district of its specific level of property tax relief in early May. Under the law, Pennsylvania homeowners will see the property tax reduction itemized on their tax bill, which most school districts will issue this summer.

The amount of property tax relief in each school district will be available online in early May at www.PAPropertyTaxRelief.com.

Media contact: Susan Hooper, 717-265-8067

Editor's Note: The text of Soderberg's letter to Secretary Zahorchak is attached below.  

April 15, 2010

Dear Secretary Zahorchak:

This certification marks the third year of statewide property tax relief for Pennsylvania homeowners.   This year, $772.5 million will be available for property tax relief, bringing the total property tax relief provided to date to $2.4 billion, including funding for the enhanced Property Tax/Rent Rebate Program.

The balance in the Property Tax Relief Fund as of today is $418.1 million, including $83 million in the Property Tax Relief Reserve Fund.  I am projecting that an additional $367.7 million in revenue will be deposited into the fund in the next six months, bringing the total amount in the fund to approximately $785.8 million by October 15, 2010.  

To satisfy the sustainability requirements of the Taxpayer Relief Act of 2006, $69.7 million will be transferred from the Property Tax Relief Reserve Fund to the Property Tax Relief Fund for general property tax relief payments. Delays in facility openings and continued increases in non-taxable promotional play have contributed to the decline in projected revenues.  Therefore, I am certifying that the balance in the Property Tax Relief Reserve Fund will be $13.3 million by October 15, 2010.

Of the amount projected to be in the Property Tax Relief Fund by October 15, 2010, $26.9 million will be transferred to the Lottery Fund to reimburse costs related to supplemental property tax rebates. Additionally, $129.1 million will be transferred to the Lottery Fund for enhancements to the Property Tax/Rent Rebate Program.  The 2010-11 fiscal year marks the fourth year of the enhancements made to the Property Tax/Rent Rebate Program. 

In addition, $21.5 million will be used to reimburse eligible school districts pursuant to Section 324 of the Taxpayer Relief Act. These are known as Sterling Act reimbursements.

After subtracting the amount of funding required for the Property Tax Relief Reserve Fund, supplemental funding for the Property Tax/Rent Rebate Program and Sterling Act reimbursements, I certify that $595 million will be available for statewide property tax relief.  Philadelphia's share of funding for broad-based tax relief – $85.9 million – will be used to reduce the city's wage taxes instead of property taxes, since the wage tax is the greater barrier to economic growth in that city.  

Under the terms of the Taxpayer Relief Act, homeowners will see their property tax reduction itemized on their tax bill, which school districts will issue this summer.  The amount of property tax relief will vary by school district.  The Department of Education will notify each Pennsylvania school district of its property tax reduction allocation no later than May 1, as the act requires.

Please let me know if you require any additional information or assistance from my office.

Sincerely,

Mary A. Soderberg

Secretary of the Budget

SOURCE Pennsylvania Office of the Budget