During the last budget cycle, the state’s tax code included a provision to remove more than $130 million annually from the Property Tax Relief Fund. The fund was created the same year we legalized gambling in Pennsylvania, and a portion of slot machine tax revenue goes into the fund.
The foundation has received an average of over $627 million annually, and this is reflected as a reduction in your tax through the tax exemption. To date, the fund has paid more than $9.4 billion in property taxes to Pennsylvania homeowners since the casino opened. When table games were legalized in 2010, the resulting tax revenue went into the general fund until Pennsylvania’s Rainy Day Fund reached $750 million, which it did this year.
So $130 million more in taxes was supposed to go to homeowners this year until the Internal Revenue Code changed that. I voted against the bill and immediately introduced SB1308 to reverse that decision. Many of my colleagues, who I thought supported property tax reform, inexplicably voted for the change.
It wasn’t the first time this session that the Senate has had an opportunity to push efforts to reform the estate tax. Twice this session, my constitutional amendment calling for the elimination of property taxes on homeowners by 2026 and requiring the Legislature to come up with a replacement plan has been introduced by my colleagues in the Senate, many of whom I believe once again supported abolition of property taxes for homeowners.
The problem of property taxes is real, especially in the Lehigh Valley and other parts of the state that don’t get their fair share of state funding. This is slowly being addressed through new public money coming from the fair funding formula, but frankly, it’s not fast enough.
School property tax issues are not uniform across the state because of the inequitable way public education is funded in Pennsylvania. As a result, not all areas of the state feel the same pressure to address this issue now. Revenue from slot machines has reduced property taxes by an average of $200 per homeowner statewide. Obviously, $200 is more significant if property taxes are lower and remain the same.
Unfortunately, most homeowners in this area have not experienced the benefits of the casino property tax break. Estimates show that the revenue from replacing the property tax break is about $9 billion. Several proposals have been made to raise personal income and sales taxes. We can redirect slot machine money that now goes to the property tax credit to help reduce the growth of other taxes.
The fact remains that a decision will not come from lawmakers until they are instructed to make it, so a constitutional amendment requiring a specific date makes sense. This will give everyone enough time to find the right mix of funding so that we continue to fund access to education for Pennsylvania’s children at a level that ensures our future success.
In today’s world, it has become clear that many of my colleagues who previously advocated repealing school property taxes are now unwilling to make the necessary decisions to repeal school property taxes.
Therefore, it is imperative that we use every avenue available to get Pennsylvania homeowners the property tax relief they need. Clearly, using the constitutional amendment process would be a potential way to get homeowner property tax relief.
Boscola, a Bethlehem Democrat, represents parts of Lehigh and Northampton counties.