The state has calculated how much money homeowners can expect in property tax relief this fall from legalized gambling, and while all the numbers weren’t in for Luzerne County, it looks like the same broken record: Your taxes may go up; your tax relief remains the same.
For Luzerne County residents, school district property taxes have risen anywhere from 2.5 to 24 percent since 2009-10. In contrast, the dollars knocked off those bills for eligible homeowners have remained the same, rising or falling by $1 to $3.
In fact, that trend has been going on so long that odds are good you are paying more in school property taxes this year despite the tax break than you were when the state first began parceling out tax breaks.
The breaks come courtesy of the law known as Act 1 of 2006, which had two main components:
• Every year it takes a portion of state money generated through legalized gambling and doles it out to school districts for property tax relief using a complex formula intended to get the most money to the neediest districts. Districts, in turn, divvy their share equally among all eligible property owners — you must live in the home and you must apply for the exemption.
• It limits property tax hikes to an “Act 1 Index” calculated for each district each year. A district can exceed the limit only through a voter referendum in the primary election that year, or by seeking and getting a state exception for a narrow list of reasons generally considered beyond district control, such as soaring costs in pension payments or special education.
This week the state unveiled how much money each district will receive for tax relief in 2014-15. The state also gave an estimate of how much money each eligible property owner will save on taxes, though in many districts — including all 11 in Luzerne County — the data is incomplete: There is no information on how many properties are eligible.
Department of Education spokesman Tim Eller said in an email those figures come from the counties, and will be added to the state data as they are received. Tony Alu, who heads the Luzerne County office responsible for tracking homestead exemptions, was at a seminar Monday and unavailable, a person in the assessor’s office said.
But the number of eligible properties has been fairly constant through the years, and to get an estimate of what each eligible homeowner can expect, The Times Leader divided the total amount each district will get this year by the total number of eligible properties last year.
The results follow the trend in place ever since the homestead exemptions were first made in 2008-09: Whatever tax relief you got last year, or any of the years before that, is what you can expect to get this year, give or take a few bucks.
Rising tax rates
Tax rates have not been nearly as stagnant. According to state data, from 2009-10 to this school year, property taxes in Luzerne County districts have increased anywhere from 2.5 percent in Greater Nanticoke Area to 24 percent in Lake-Lehman.
To put it in dollars, consider a person who owns a house assessed at $100,000 in each district. The tax rate is calculated in mills. A mill is a $1 tax on every $1,000 of assessed property value.
Once the countywide reassessment was completed and new millage rates were calculated in all districts beginning in 2009-10, figuring out taxes on such a hypothetical house became basic math. If you are paying 8 mills on a $100,000 home, your tax bill is $800.
So if you own that $100,000 house in, say, Crestwood School District, your millage in 2009-10 was 8.5145 and your tax bill was $851. Your tax exemption under Act 1 was $66, for a net bill of $785.
Fast forward to 2013-14, when your millage rate was 9.2156, giving you a tax bill of $925. Your exemption was $64 for a tax bill of $861. Your tax bill now with the exemption is higher than your tax bill then without it.
The math works out similarly in five other Luzerne County districts: Dallas, Lake-Lehman, Pittston Area, Wyoming Area and Wyoming Valley West.