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Auditor General Jack Wagner Seeks Extension for Taxpayers Seeking Property Tax Relief from Slots Casino Revenue
Asks Gov. Rendell again to extend deadline to April 15
HARRISBURG, Pa., March 10, 2010 – Saying that he believed there were still tens of thousands of Pennsylvanians who are interested in receiving property tax rebates from slots casino revenue, Auditor General Jack Wagner today again asked Gov. Rendell to extend the filing deadline to April 15.
Wagner also urged county assessment offices to keep applications that they received after the March 1 deadline. If Gov. Rendell extends the filing deadline, late applicants would receive tax rebates this year; if the governor declines to extend the deadline, then tardy applicants would begin receiving rebates in 2011, Wagner said.
“The state has promised repeatedly that every homeowner in Pennsylvania will get tax relief from slots casino revenue,” Wagner said, “and so the state should make every effort to make sure that everyone gets it.”
A recent report by Wagner concluded that potentially hundreds of thousands of Pennsylvania homeowners were interested in property tax relief from slots casino revenue but had not applied for it because of the state’s complicated, fragmented and cumbersome application process. Wagner’s report called for a single state entity, such as the Department of Revenue to administer the program and for Gov. Rendell to push back the filing deadline for property owners.
To help property owners, Wagner posted the one-page application on his web site, www.auditorgen.state.pa.us; he also encouraged property owners to call his taxpayer advocate, toll-free, at 1-800-922-8477, to seek assistance.
Wagner’s effort at informing property owners of available tax relief triggered an increase in applications during the week leading up to the March 1 deadline. In Allegheny County, more than 2,200 applications poured in during the final five days.
His offer of assistance also prompted more than 2,000 calls to the taxpayer advocate hotline, the most in department history, during the week leading up to the March 1 deadline. The taxpayer advocate has received more than 700 additional calls from property owners since March 1 – an indication that there are still many homeowners interested in applying, Wagner said.
“The sheer volume of calls my department has received since the release of our special report confirms my belief that taxpayers are confused about how to obtain property tax relief and whether or not they have received the property tax relief that they were promised when casino gaming was legalized in Pennsylvania,” Wagner said. “Taxpayers want a sense of fairness in that they have received the relief that they were promised, no matter what the dollar amount.”
Wagner’s special report noted that Pennsylvanians on average received about $189 in property tax relief. The actual amounts ranged from a low of $63 to a high of $525.
The General Assembly, at Gov. Rendell’s urging, legalized slots casino gambling in 2004 in order to reduce property taxes, create jobs, and revitalize the commonwealth’s horse-racing industry. Twelve of the 14 possible slots casino licenses were awarded by January 2010, and nine of those 12 casinos were open and operating.
According to state law, 55 percent of casinos’ revenues are to be returned to the state, with 34 percent of the commonwealth’s share earmarked for property tax relief, 12 percent for the Pennsylvania Race Horse Development Fund, 5 percent to the Economic Development and Tourism Fund, and 4 percent to local and county governments.
Gaming revenues fund two types of property tax relief: open eligibility, for homeowners of all ages and incomes, and restricted eligibility under the completely separate Property Tax and Rent Rebate Program for low-income homeowners, mostly senior citizens.
But as Wagner’s 62-page special report – the result of a one-year review of public documents and newspaper accounts, and the Taxpayer Relief Act, as well as interviews conducted by experienced performance auditors – noted, many property owners are not even aware that they are eligible for tax relief.
According to Wagner’s report at least one million of three million residential properties in 49 counties had not received any tax reduction through January 2010. Not every one of these properties would have been eligible for tax relief because they may have been the owner’s second home or a rental property. However, if only 10 percent of those million properties were primary residences eligible for tax relief, it would mean at least 100,000 Pennsylvanians have missed out on rebates they were promised, Wagner said.
Wagner’s report cited many reasons for why Pennsylvania homeowners are missing out on property tax relief. The primary reason is that relief is not automatic; homeowners must apply for it.
But auditors also found that some homeowners never received applications and some homeowners who did were confused by language used in the one-page applications, such as the antiquated terms “homestead’’ and “farmstead.” One property owner e-mailed Wagner to say that she did not complete her application because of a warning that threatened prosecution if she filed a claim for tax relief and was already receiving it.
Wagner called on the General Assembly to approve legislation that clarifies the language in the law, makes the application easier to understand, and designates the Department of Revenue as the administrator of the program.
Wagner’s report noted that another point of confusion for taxpayers was the fact that property tax relief does not come in the form of a rebate check. Instead, it comes in the form of a tax bill reduction and taxpayers have to look for evidence on their school property tax bill under the terminology of homestead or farmstead exclusion. The report also noted that in Philadelphia, gaming revenues reduce wage taxes, not property taxes. Philadelphia residents do not have to apply for this relief because the relief occurs by an automatic reduction to wage taxes for every working taxpayer.
Adding to the confusion was the fact that the state’s property tax relief web site provides inadequate information. For example, Wagner’s auditors found that the state’s site includes neither an application nor a link to one and no information about eligibility requirements or even how to apply for property tax relief. Furthermore, the site confuses homeowners even more because it does not distinguish between the tax relief available to all homeowners and the tax rebates available under the Property Tax and Rent Rebate Program.
“For the sake of Pennsylvania taxpayers, state government must improve its oversight, communications and administration of this vitally important program, so that financially strapped homeowners get the financial relief they were promised by slots casino gambling,” Wagner said.
Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly. He is the Commonwealth’s elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations. The Department of the Auditor General conducts more than 5,000 audits per year. To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department’s Web site at www.auditorgen.state.pa.us
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