Tax Relief Allocations in Pennsylvania

Homeowners in the Pennsylvania suburbs due property-tax relief provided by slot-machine revenue will get anywhere from $72 to $632 next school year, down slightly for most from last year, according to figures released by the state.

In Philadelphia, that aid comes in the form of a cut in the wage tax. Those who pay it will get about the same amount of relief as they did last year. The tax relief, which comes from the state's share of gaming revenue under the 2006 Act One, is not given directly to households or individuals. In the suburbs it is entered as a credit on tax bills; in the city, it is used to lower the wage-tax percentage.

Suburban property owners must register to get the benefit by Dec. 31 of the previous year; sign-up information is available at local school districts. The amount of tax relief each homeowner gets depends on a variety of factors, including the wealth of the school district, how highly taxed it is, and how many homeowners have applied for the credit.

The total amount of property-tax relief will be up slightly for next school year, but in many school districts, the rebate to each homeowner will be down somewhat. That's because more people have applied for the tax credit, spreading it thinner. Shifts in relative school district wealth and tax burden between 2009-10 and 2010-11 also changed the amounts doled out in each district.

Residents of the 63 suburban districts will get about $142.3 million in property-tax relief, up from about $139 million last year. But the per-household payment fell by a few dollars in close to two-thirds of districts. About 606,000 households applied for the tax credit, up about 3,000 from last year.

The average property-tax credit in the Pennsylvania suburbs is $251, up from $247 last year. The estimated tax-credit reductions in those area districts whose per-household allocation dropped were relatively small - less than $10 in most cases while in a few cases, increases in the tax credits were larger. For example, homeowners will get an estimated $95 more in tax relief next school year in Jenkintown, and those in Octorara will get $62 more. The amount of wage-tax relief going to Philadelphia employees and commuters who work in the city is about $86.3 million this year, only a few thousand dollars more than last year.

An additional $21.5 million in Act One gaming revenue will reimburse Philadelphia area school districts whose residents do not pay local earned income taxes because they work in Philadelphia and are charged the Philadelphia wage tax. This year, the city wage tax is 3.93 percent for residents and 3.50 percent for nonresidents.

Statewide, Act One, enacted as a companion to the legislation legalizing slot machines, is providing $616.5 million in tax relief next school year, up from $613.2 million last year. Under Act One, gaming money was also used to expand the senior citizen Property Tax and Rent Rebate program, so the total amount of tax relief from gaming revenues will total about $772.5 million, up slightly from last year. This is the third year of tax relief allocations from Act One.