Property Tax Relief: The Devil’s in the Details Karen Miller, Executive Director, Pennsylvania Economy League's State Office www.IssuesPA.net Property Tax Relief: Gambling Toward Tax Reform – articles on www.IssuesPA.net • Slots and Property Tax Reduction: Unfinished Business • In the Game to Win • Putting a Billion Dollars in Perspective • In the Mix • Gambling in Other States 3 Property Tax Relief: There’s a reason why – after decades – it’s still not a reality: The Devil’s in the Details. 4 Property Tax Relief: The Formula PI/ADM + MV/PI + STR + EM x ADM x NF 1,000 IF < MIN % RELIEF, ADD $$ IF > MAX % RELIEF, SUBTRACT $$ DIVIDE BY # QUALIFIED HOMES AND FARMS IF NECESSARY, ADJUST FOR HOMESTEAD EXEMPTION LIMIT = PROPERTY TAX RELIEF? 5 Property Tax Relief: $5:$1 • Goal: $5 State Gambling Revenue for every $1 Increase in local Earned Income Tax – Minimum: less than $1 – Average: $3.79 – Maximum: $13.51 » Based on $600 million in gambling revenues 6 www.IssuesPA.net Property Tax Relief: Minimums and Maximums • $63 million in state gambling revenues to boost school districts to minimum guarantee (10%) • $13 million would not be distributed because of maximum limits (40%) 8 » Based on $600 million in gambling revenues Property Tax Relief: A Tale of Two Districts Lower Merion Reading Based on formula Based on formula $55,190 total • $7.2 million After minimum guarantee • $7.3 million After maximum limit • $5.3 million » Based on $600 million in gambling revenues 9 Property Tax Relief: Per Student » Based on $600 million in gambling revenues 10 Property Tax Relief: A Tale of Two Districts Lower Merion Reading Based on formula • $8.37 per student • $55,190 total After minimum guarantee • $1,111 per student • $7.3 million Based on formula • $503 per student • $7.2 million After maximum limit • $370 per student • $5.3 million » Based on $600 million in gambling revenues 11 Property Tax Relief: Change in the State Share Harrisburg Metropolitan Area: The Effects of Different School Aid Proposals on Revenues per Student in Low and High Tax Base School Districts Revenues per Student $10,000 $7,500 Federal Aid Income Tax $5,000 Property Tax $2,500 $0 State Aid Current After HB 113 Lebanon SD Current After HB 113 Harrisburg City SD Current After HB 113 Derry Township SD » Based on $600 million in gambling revenues 12 Property Tax Relief: The Devil’s also in the Winners and Losers. 13 Property Tax Relief: Still under discussion – Referenda – control and accountability for school directors – Minimum and maximum levels of property tax relief – Whether to require local income tax increase – Level of gambling revenues required – The who, where and how’s of the slots part of this package, and more… 14 Property Tax Relief: Still under discussion – Referenda – control and accountability for school directors – Minimum and maximum levels of property tax relief – Whether to require local income tax increase – Level of gambling revenues required – The who, where and how’s of the slots part of this package, and more… 15 www.IssuesPA.net