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House Bill 1225
Local Senior Citizen Property Tax and Rent Rebate Act

Timothy Allwein
PSBA Assistant Executive Director of Governmental and Member Relations

Thank you Chairpersons Mundy and Hennessey and members of the committee for the opportunity to testify on House Bill 1225, the Local Senior Citizen Property Tax and Rent Rebate Act.

More than anyone else, the members of PSBA are acutely aware that school property taxes in Pennsylvania are too high and that they affect senior citizens on fixed income and those with low income disproportionately. That is why proposals such as HB 1225 are important, they allow local taxing jurisdictions the ability to provide for helpful programs like property tax and rent rebates.

School districts currently are limited in the types of property tax assistance they can give to senior citizens, but they do what they can. A 2005 survey conducted by PSBA found that many districts participate in senior citizen tax rebate programs. These programs typically give senior citizens a tax credit, usually around $500.00 in exchange for volunteering at the school district.  The programs have dual benefits: they provide some property tax relief for those who are most in need (most districts have an application process) while the district gets to employ a community resource that is most often underutilized: its senior citizens. These individuals are employed in a variety of tasks, from tutoring and reading to students to helping in the cafeteria or library, working with custodial staff or with the groundskeeping staff. Best of all, districts reported that all parties were satisfied with the success of the programs.

The local senior citizen property tax rent and rebate programs authorized by House Bill 1225 strike us as a good idea. PSBA was on record in support of Chapter 13 of Act 1, which greatly expanded the state’s Property Tax and Rent Rebate program. We strongly believe that the lowest income seniors who own their property should be given as much assistance with property taxes as possible. This bill gives school districts an opportunity to do something positive for those who have the greatest difficulty with paying their property tax bills. And not just school districts, all municipalities would have the opportunity to do so, thereby increasing the assistance these individuals can receive.

These programs would be an excellent complement to the credit programs described previously. Since there are difference among school districts as to whether or not a tax credit plan is the right way to go, implementing a property tax and rent rebate program would be a way for a school district to give senior citizens a property tax relief without some of the concerns that accompany tax credit programs. 

As a practical matter, however, we must ask ourselves whether or not these programs are viable given their costs and the fact that limited dollars may be spread among a large group of applicants. This would have the effect of driving down the amount of rebate. Despite these concerns, local property tax and rent rebate programs still offer an alternative to tax credit programs or any other programs being utilized by school districts for the benefit of seniors. PSBA likes that the programs are not mandated by the legislation and that the amount of rebate is not prescribed. This will allow districts with limited resources that may want to participate to do so.

Finally, while these programs can help, they will never be able to provide the kind of assistance that a comprehensive property tax relief package can give. In PSBA’s view, this means providing additional or alternative ways for school districts to raise current revenue, helping school districts manage costs, especially those that are caused by state requirements and increasing the participation of the state in funding public education. No property tax reform that meets all three standards can fail and none can succeed in the long term unless all are addressed.

We do have a few recommended changes to the bill. Section 3(d) of the bill on page 5 requires school districts to inform all local tax paying citizens of a program under this act within 12 months of the effective date of the section. Rather than inform citizens about a plan that may not be implemented, we would ask that the language be changed so that a school district would have to inform its citizens of the availability a program within 60 days of its authorization and that the information include details on who is available, the application process, the amount of rebate and how it will be deducted from property tax bills. We would also ask for a change to Section 19, Accountability, so that the act would apply to the next tax year immediately following enactment of a program and that districts would be required to communicate by May 1 (municipalities by Nov. 1) of each year whether it will be able to sustain the program for the following fiscal year.

 Thank you for letting PSBA participate in this hearing and I will be happy to take your questions.

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