Property owners in the Tyrone Area and Bellwood-Antis School Districts can thank the slot machine when they see a reduction in their state property tax.
But, those taxpayers will have to wait until at least the 2006-07 school year before seeing a reduction according to language in Senate Bill 100 which outlined the state’s property tax reform legislation.
One area legislator, State Rep. Jerry Stern (R-Blair) said the language leaves open the possibility the relief won’t happen until the 2007 fiscal year.
When Gov. Ed Rendell signed the slot bill into law on Monday, he also authorized another bill that finances $1 billion a year in property-tax reductions.
Stern released figures which show Tyrone Area property owners could receive as little as a 27 percent reduction in taxes, or as much as a 46 percent reduction based on a range of estimated gambling revenues from $500 million to $1 billion.
According to information provided by Representative Stern, if the industry were to gain $500 million in revenues, the average Tyrone Area property owner would see a reduction of $144 per homestead or 27 percent. At the $750 million dollar level, the savings jumps to $196 or a 36 percent savings and at the $1 billion level, taxpayers would see a $250 savings or 46 percent.
However, for that to be accomplished, Stern noted each district will have to impose a 0.1 percent increase for local earned income taxes. He noted districts could impose a larger increase if they desired to qualify for additional funds which could be made available from districts who would “opt out’ of the arrangement.
A 0.1 percent increase in the local earned income tax would generate $148,256 in the Tyrone Area School District according to figures made available by Stern. The 27 percent property tax reduction figures represents a total savings of $413,759 district-wide. At the 36 percent level, the figure increases to $620,639 and at the 46 percent reduction level, the savings jumps to $828,765.
In the Bellwood-Antis School District, the figures are as follows:
• with estimated gambling revenues at $500 million, a savings of $155 for the average property owner which translates to a 22 percent reduction or a district-wide savings of $307,737;
estimated revenues of $750 million, $212 or 31 percent reduction in property taxes or a district-wide savings of $461,605;
• estimated $1 billion in revenues, a $271 or 39 percent reduction in property taxes or a district-wide savings of $616, 423.
The above figures are based on the district increasing the local earned income tax by 0.1 percent to generate $103,297.
The figures are based on legislation which provides for 34 percent of slot proceeds to go to the state for funding of the property tax-relief program.
The law authorizing slots allows up to 61,000 machines to be placed at 14 sites throughout the state.
The owners of the gambling licenses would keep 48 percent of the roughly $3 billion a year, slots are expected to generate, the state receives 34 percent and the rest would go to the horse racing industry, public construction projects as well as money to the municipalities and counties where slots are located.
A new gambling commission would issue slots licenses to racetracks, resorts and other sites for fees ranging up to $50 million each. Seven licenses would be granted to horse-racing tracks, including ones not yet built. Five licenses would be given to standalone sites and two licenses would be given to resorts.
Information for this article regarding estimated property tax reduction dollar amounts and percentages were provided by State Representative Jerry Stern.
