Among the many questions in a tentative state budget deal is how revenue from the sales tax increase would be distributed. The Associated Press notes this will be a major source of contention should the plan pass.
Under a formula initially proposed by Wolf, Philadelphia would get 14 percent of the money; under the House GOP plan, it got 5 percent. Under Wolf’s plan, wealthy Lower Merion would get less than 1 percent; the House GOP plan would give it almost three times as much.
Last Thursday, Gov. Wolf said he wants to see “a progressive formula to distribute the resulting property tax reductions.”
While we don’t yet know what the new formula might look like, we can look at how the $616 million in slot machine revenue is currently distributed.
Overall, slot machine revenue for property tax relief yields $222 per homeowner. This varies widely by school district—from $46 per homeowner in Bryn Athyn school district to $653 per homeowner in Chester-Upland.
Most districts (376 or 75 percent), however, receive less than the average $222 per homeowner.
Meanwhile, Philadelphia’s revenue—$86 million or 15 percent of the total—is dedicated to reducing the city wage tax rather than property taxes.
This redistribution—along with school tax increases—shows why most homeowners are disappointed. They’ve never seen the promised tax relief from gambling.
The table below shows the top 10 and bottom 10 current recipients, per homeowner.
|Property Tax Relief By District|
State Property Tax Reduction Allocation
|Estimated Tax Relief per Homestead and Farmstead|
|Allentown City SD||Lehigh||$9,639,281.38||16,948||$569|
|York City SD||York||$2,901,801.73||5,473||$530|
|Pleasant Valley SD||Monroe||$4,069,921.61||8,604||$473|
|William Penn SD||Delaware||$3,404,197.02||7,380||$461|
|Cheltenham Township SD||Montgomery||$3,609,813.90||8,062||$448|
|Harrisburg City SD||Dauphin||$2,774,667.62||6,331||$438|
|Mid Valley SD||Lackawanna||$261,188.73||4,010||$65|
|Eastern Lancaster County SD||Lancaster||$446,237.91||6,857||$65|
|Saint Marys Area SD||Elk||$348,202.23||5,596||$62|
|Mars Area SD||Butler||$327,476.67||5,717||$57|
|Cumberland Valley SD||Cumberland||$916,543.69||16,489||$56|
|Palmyra Area SD||Lebanon||$342,742.08||6,572||$52|
|Bryn Athyn SD||Montgomery||$9,283.10||202||$46|
Promising property tax relief is one thing, but delivering real relief requires a fair formula and strict spending controls.
Nathan Benefield ([email protected]) is Vice President of Policy Analysis for the Commonwealth Foundation. Reprinted with permission. An earlier version of this article appeared at http://www.commonwealthfoundation.org/policyblog/detail/how-is-property-tax-relief-doled-out/