A Closer Look at the Governor’s Plan to Broaden Property Tax and Rent Rebates

Governor's property tax and rent rebate

This week, concerns have been raised regarding how the state intends to finance expanded tax rebates for low-income homeowners and renters without redirecting funds from more general relief initiatives.

The minority chairman of the House Appropriations Committee, Seth Grove, a Republican from York, voiced his suspicion that the administration’s proposal involves diverting $250 million from the property tax relief fund to finance the broadening of the rebate program. He finds this strategy unacceptable.

Grove shared, “One of our principal worries was depleting funds initially intended for property taxpayers and then transferring it to a select group.” He added, “In actuality, Josh Shapiro had the capacity to grant individuals a billion dollars in property tax relief this year, but chose not to.”

Incepted in 2006, the property tax relief fund utilizes revenue from gambling to alleviate property taxes for homeowners, regardless of their income bracket. Data from the Office of the Budget reveals that the average annual benefit per household in 2022 stood at $290.

Khalid Mumin, the Acting Budget Secretary, authorized $864.4 million for property tax relief last month, leaving a residue of $250 million. Grove stated his confusion regarding why the complete balance wasn’t endorsed and speculated that the leftover funds would be used to subsidize the rebates in the forthcoming years.

Grove pointed out, “Based on the data, it appears they retained the balance to facilitate the expansion.” He further expressed his apprehension, “Are you repurposing homeowners’ funds to execute this expansion? Judging by the way things seem and the subsequent increases – the answer is yes.”

The property tax/rent rebate program, financed through lottery revenues, has since its launch in 1971, distributed $7.6 billion to eligible homeowners and renters. However, unlike other public assistance programs, the income limits and rebate figures of this program have not been revised for nearly two decades, thereby disqualifying thousands of residents. Governor Shapiro insists this must be rectified.

During a visit to the Erie West Senior Center, the governor stated, “We can’t wait another year. It’s been 17 years since we’ve updated this, 17 years since we’ve confronted our seniors and asked, ‘What do you need to survive?’”

Manuel Bonder, the spokesperson for the governor, informed The Center Square that the administration’s plan provides a “lifeline” to seniors and other individuals subsisting on fixed incomes who are predominantly affected by inflation and escalating costs.

Bonder elaborated, “Governor Shapiro is committed to unifying Republicans and Democrats to deliver benefits to all Pennsylvanians – rather than participating in the political chicanery that frequently obstructs problem-solving.”

The Department of Aging reports that the rebate program annually aids 570,000 seniors in affording their homes. Shapiro proposes increasing the maximum rebate from $650 to $1,000 and raising the income limit to $45,000, adjusted yearly in line with inflation.

The administration projects that several participants would witness nearly double their rebates, while an extra 175,000 residents would qualify for the first time.

Grove affirmed that House Republicans also want to assist senior homeowners, but they “simply can’t afford” to implement the governor’s approach.

“We understand his arguments – the amount has indeed depreciated,” he conceded. “We are eager to collaborate with him on a property tax rebate program, but not the one he introduced, because it’s financially impossible to do both – and I believe we should be distributing it to everybody.”

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