Promises for property tax relief through casinos short of expectations
They had a nice, round number.
While the bill that eventually became the 2004 slots law made its way through the Legislature, proponents declared the new gaming law would create $1 billion a year for property tax relief.
But since the first casinos began offering slots play in 2006, the money that’s gone toward that purpose has fallen short.
“It was kind of a hook for those that were leading that effort in the Legislature to get us to vote” for the bill, said retired lawmaker Pete Daley.
Daley, a California attorney, represented that part of the Mon Valley in the Legislature for 34 years before retiring in 2017. He recalled the push for the changes to the law by gambling interests as the most heavily lobbied and well-orchestrated efforts he’d seen in Harrisburg.
The program involves redistributing the money gamblers spend on slots to offset the tax bills of eligible home and farm owners.
In most of Pennsylvania, eligible property owners get a reduction in their school district tax bills through the homestead and farmstead exceptions. In Philadelphia, it’s in the form of wage tax reduction. To date, that money’s amounted to about $9.16 billion.
The state Department of Education expects to distribute $620.5 million for tax reduction during the fiscal year that starts July 1.
Another state program that redistributes lottery and some gambling revenue to low-income seniors and people with disabilities as rebates on rent and property taxes comes to another $146.3 million.
In Washington County, reimbursements will range from $103 in Canon-McMillan School District to $490 for taxpayers in Washington School District.
Gambling revenue alone would never have eliminated property taxes – $14.9 billion statewide for school districts alone in this fiscal year.
Doug Harbach, a spokesman for the Pennsylvania Gaming Control Board, said the use of the term “relief” was misleading.
“It should have probably been called a reduction,” he said.
Even so, he said many people who benefit from the program don’t realize they are. Most tax bills throughout the state have a line item for the “homestead exception,” but no reference to where it comes from.
When he talks to community groups, he asks how many people are receiving the money.
“I’ll get zero to four hands up out of a group of 30,” Harbach said.
Rep. Tim O’Neal, R-South Strabane, posited that a program like a rebate homeowners have to formally request would make them more aware of the program.
Even with gambling money offsetting them, property taxes – which provide most money for schools as state funding remains flat – remain a bugbear for lawmakers and their constituents.
“When it comes to property tax relief, whether you’re talking about gaming or not, I can tell you that seven of the reps from our area are working on it,” said O’Neal, who won his first full term in November after winning a special election earlier last year. His district contains North Strabane’s Meadows Racetrack and Casino. “We are actively pursuing ways to help, even if it’s incremental help, for those who are struggling with their property taxes.”
Property taxes closely tie the funds that go to education to real estate values, meaning schools’ resources vary widely from one district to the next.
Dovetailing on a state constitutional amendment that voters approved in 2017, Rep. Pam Snyder, D-Jefferson, is part of a group of lawmakers pushing a proposal that would create an additional 1.8-percent personal income tax on top of the existing one of 3.07 percent to allow school districts to stop levying property taxes altogether.
Rep. Marcia Hahn, R-Northampton, is that bill’s prime sponsor. It hasn’t moved since it was referred to the House Finance Committee two months ago.
“I don’t think it’s fair that our kids do not have the same opportunities because of their zip codes, and I don’t think it’s fair that we put the burden on property owners,” Snyder said.