Senate News Update
From Senator Jane Earll
December 7, 2009

Property Tax Relief Update

A question I am often asked is, "Whatever happened to the property tax relief from the gaming funds?"   There is a perception that this money is going to municipalities, counties, and other recipients, but not helping homeowners.

A bit of background may be useful.  Originally, the Senate intended for all property taxes to be reduced by the implementation of a Homestead/Farmstead Exclusion.  However, the law that finally passed in 1998 (Act 1998-50) contained provisions only for school property tax reductions, as this is normally the largest proportion of the tax burden.  The exclusion, which you file with Erie County, registers your property as being a primary residence and verifies that the named owner is responsible for paying property taxes.  (Once filed, the exclusion remains valid until you transfer the property, and if you move, new exclusion forms are due by March 1 each year.)

When the gaming law was passed (Act 2004-71), it provided for a division of the revenues from casino gambling, less winnings, as follows:

• Property tax relief/state programs - 34 percent
• Economic Development - 5 percent
• Host municipality/county - 4 percent
• Horseracing industry - 9 percent 

This leaves approximately 48 percent of the funds for the casino operators’ profit.  However, the state takes additional funds from the remainder for administrative purposes, and this amount may vary from month to month, so the operators do not receive an exact percentage.

The 34 percent share supports the Property Tax Relief Fund, established in Act 2004-71.  Monthly deposits are made into the fund, and these were tracked from the opening of the first casinos until its balance reached $400 million.  At that point, which occurred in 2008, the provisions of the Taxpayer Relief Act (Act 2006-1, Special Session 1) specified that as of April 15, the Secretary of the Budget would certify the total available for property tax relief.

In summer 2008, school districts received their first allocation in a lump sum to reduce total school property taxes for those homeowners and farmstead owners registered as participants in the Homestead/Farmstead Exclusion.   Each district divided its lump sum allocation equally among all those on the list as of May 15, once the district determined its own real estate tax rates.  This process has continued into 2009 and, if the balance of the Property Tax Relief Fund permits, will continue into the future.  Offset amounts are shown on the school tax bill, below the face amount.

Approximate Property Tax Relief by School District, 2008/2009:

*School taxes in the City of Erie are due in April; as the 2008 allocation was not distributed until after May 15, 2008, the reduction first appeared on the 2009 school tax bill.

You can view the certified figures for each school district online at the Pennsylvania Department of Education website: www.education.state.pa.us by clicking on "School District Property Tax Relief" under the "Hot Topics" on the homepage.

If you qualify for the Homestead/Farmstead Exclusion and have not signed up, be sure to do so by March 1, 2010.  Forms are available online at www.eriecountygov.org, or from the County Assessment Office.

CONTACT: Senator Earll's office, (814) 453-2515 or jearll@pasen.gov