Pa. Budget deal includes $140 million in property tax relief

HARRISBURG – Thousands of seniors, people with disabilities and others particularly burdened by rising property taxes and rents will receive a temporary but welcome gift worth a combined $140 million under the agreement Pennsylvania’s proposed $45 billion budget signed by Gov. Tom Wolf on Friday.

The package that was negotiated in secret and released Thursday includes a one-time $140 million increase to the state’s property tax rent relief program.

The program had more than 440,000 applications approved for payment in 2020, for a total of $213.2 million. Approved applicants earn rebates by paper check or direct deposit.

The Senate voted 47 to 3 on Friday to approve the main budget bill, following its approval in the House on Thursday. Other related bills were still making their way through the Legislative Assembly.

The Lehigh Valley area has some of the highest property tax burdens in the state.

A ranking by the Independent State Tax Office showed Monroe County was the highest among 67 counties – with total taxes accounting for 5.7% of total income – while Northampton County ranked fifth and Lehigh 10th.

The Property and Rent Tax Relief Program is designed for people age 65 and older, widows and widowers age 50 and older, and adults with disabilities. It has income limits of $35,000 per year for homeowners and $15,000 per year for renters, excluding half of Social Security income.

Typically, it sends discounts for hundreds of dollars per applicant.

Revenue Department spokesman Jeff Johnson said if the ‘nudge’ becomes law, people who have already applied for 2021 rent and tax rebates have nothing else to do. . And, the deadline for claiming these rebates was recently extended to December 31.

In March, Wolf offered to give the program a one-time $200 million boost using a pool of more than $2 billion in federal COVID-19 relief funds that the state had set aside. The following month, Democratic Representative Steve Samuelson of Northampton County introduced a bill to implement Wolf’s proposal.

If the budget package gets final approval, Johnson said the department will work quickly to secure the bonus discounts.

“As Governor Wolf said when he introduced this proposal earlier this year, this one was designed to quickly provide financial support to elderly and disabled Pennsylvanians,” Johnson said.

Samuelson said the switch would allow claimants to get 70% higher refunds than they otherwise would have.

School districts — not the state government — set the rates for property tax bills that are sent to home and property owners statewide in July. But lawmakers hoped the record $850 million increase in spending from the K-12 education budget deal could ease the need for property tax increases.

Republican Rep. Gary Day of Lehigh County was among them. But past experience, he said, showed there was no guarantee that tax increases would be avoided.

Day, who chairs the House Aging & Older Adult Services Committee, said the $140 million increase in property tax and rent reimbursements was “good prioritization of funds.”

But he feared that next year, when the single silver spoonful is no longer available, the discounts could shrink.

“I wonder if we will be able to fund this in future budgets,” he said. “Once you have expenses, people consider them taken away.”

The following totals are for 2020 property tax refunds issued to ratepayers in these counties in the Lehigh Valley area:

  • Berks…$7,380,763
  • Montgomery…$5,999,673
  • Lehigh…$5,962,293
  • Dollars…$5,723,256
  • Northampton…$4,758,503
  • Schuylkill… $3,654,182
  • Monroe… $2,306,999
  • Carbon…$1,572,945

Lehigh Valley regional lawmakers have struggled for years with the property tax issue.

Democratic state Senator Lisa Boscola of Northampton County, speaking in the Senate on Friday, expressed disgust at the lack of progress.

“We just can’t do it right in this place anymore,” she said.

Late Thursday night, a Boscola proposal to abolish property taxes altogether by 2026 — via a constitutional amendment — was defeated by the Senate Rules Committee.

The proposal stated, “No school district may levy property tax on a homestead or farm after June 30, 2026.” It aimed to replace lost revenue with a mixture of other taxes.

On Friday, she called property taxes the “number one issue” people want lawmakers to act on in Harrisburg.

The constitutional amendment process involves the public making a decision on a referendum question. Boscola said, “We missed the mark by not bringing this issue of property taxes to voters.”

Morning Call Capitol correspondent Ford Turner can be reached at [email protected].

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