On Tuesday voters across Pennsylvania will decide on amending the current Constitutional language at Article VIII, Section 2bvi that permits local taxing authorities (counties, municipalities, and school districts) to enact homestead exemptions of no greater than 50% of the median assessed value of homestead property in the jurisdiction. The question proposes allowing the General Assembly to raise the amount of the exemption to as high as 100% of the assessed value of homestead property.
This week at its regular meeting the Pine-Richland School Board discussed the merits of the amendment, but raised skepticism about the proposal since there is no companion measure (as of yet) to make up revenue if the measure should pass and the Legislature writes legislation to permit local taxing authorities to raise the exemption. They also had complaints about the wording of the question. Of course, the current Constitutional language and the subsequent legislation (Act 50) does not force local taxing authorities to enact homestead exemptions–as noted before, even though Allegheny County has one it is one of the few counties to do so, and the only municipality in the County that has a homestead exemption is Pittsburgh. School districts fund homestead exemptions from slot machine revenues–the typical Pine-Richland homestead gets around $200 in school tax relief from that program.
Based on the District’s millage (19.58) and the median value in the District ($223k, though this is from the County’s website and it is not clear if that is just homestead property, but it will be used as a proxy) the current school property tax in Pine-Richland on that value would be $4,380. The gaming money relief lowers the bill to $4,180, essentially reducing the home’s assessed value by $10k. It would take $2,000 in gaming money to provide homestead relief close to the 50% of median assessed value in the current Constitutional language.
From the Board’s perspective the skepticism comes from the lack of a tax shift mechanism (which is somewhat true, but under Act 1 of 2006 which involved getting gaming money back to homesteads via the exemption, taxpayers in school districts can put questions on the ballot to increase the school’s earned income tax or shift to a personal income tax to fund greater relief) and the possibility of SB 76, a piece of state legislation that would end all school property taxes, not just for homesteads, was mentioned. Not many school boards have been supportive of that proposal since it would end school property taxes and then schools would be funded via statewide levies on income and sales.
