In June 2006, (then) Governor Ed Rendell signed Special Section Act 1 of 2006, the Taxpayer Relief Act. This law, known as "Act 1", was designed to help Pennsylvania school districts reduce property taxes by shifting the tax burden and utilizing gaming revenue. The legislation was designed to give voters a say in the school district's budgeting process.
Act 1 is not optional. All districts are required to abide by its regulations, even if they choose not to accept revenue from state-controlled gambling provided through the act.
Applying for a Homestead/Farmstead exclusion
Each year, the amount of property tax reduction will change based on that year's gaming revenue and the number of properties within the school district that are eligible to receive a tax break. The amount of the tax reduction must be specifically noted on property tax bills sent out by the school district.Property owners must complete a homestead/farmstead exclusion application to qualify for possible property tax reductions. For more information click: BC Board of Assessment or call 215-348-6219
School budget restrictions
Beginning with the 2007-2008 budget, school districts may not increase the real estate tax rate above an inflationary index percentage as determined by the State. School districts that wish to increase millage beyond that percentage to maintain or improve existing programs must either apply for exceptions from the Dept. of Education or receive voter approval for an increase via a tax increase referendum question during the Spring primary election. If the referendum tax question should fail, the District would be forced to cut or reduce programs from the budget. Another result of the legislation is an accelerated budgeting process for School Districts. This requires Districts to adopt a Preliminary Budget 90 days prior to the Primary Election for purposes of determining if the District will put a ballot question to the voters for a tax increase above the Index.
Referendum exceptions
There are referendum exceptions built into Act 1 should a district need to raise taxes beyond the new inflationary index cap. The exception categories provide partial relief for increases in the cost of special education, retirement expenses and health care; emergencies and disasters; and some school construction projects.
Installment payments
Act 1 requires a minimum of three and maximum of six installments. An individual who chooses to pay in installments will pay the flat tax, with no discount offered, in three equal payments. Click here to go to the Palisades Real Estate webpage to see District specific details of the Installment process.
Senior Citizens Rent/Rebate Program
The law expanded the eligibility for participation in the Senior Citizens Property Tax and Rent Rebate Assistance program and increased the dollar amount of program rebates. For more information click: Property Tax/Rent Rebate Program or call 800-362-2050