Property Tax Relief

The Taxpayer Relief Act, Special Session Act 1 of 2006, was signed into law by Pennsylvania Governor Ed Rendell on June 27, 2006.

The legislation was developed during a Special Session of the Legislature called by Governor Rendell in September 2005 to address Property Tax Relief.

Special Session Act 1:

    • Uses anticipated gaming revenue to reduce local property taxes for homeowners beginning in 2008, or later, depending on the availability of gaming funds. (Legislation authorizing racetrack gaming in Pennsylvania was enacted in July 2004);
    • Borrows revenue from the State Lottery Fund to provide tax relief for senior citizens beginning in 2007 (to be repaid to the Lottery Fund when gaming revenue is available);
    • Expands the number of senior citizens eligible for the state’s property tax/rent rebate program by increasing income eligibility from $15,000 to $35,000 (excluding half of social security income), and increases the maximum rebate award from $500 to $650;
    • Allows voters to approve a local tax shift to further reduce school district property taxes by increasing local income taxes (not to exceed 1 percent). Local tax shift referenda will be held during the municipal election of 2007 in each school district except Philadelphia, Pittsburgh and Scranton (special provisions are made for these three districts that already have local wage taxes above 2 percent). In the future, districts may choose to shift property taxes further to a local earned or personal income tax by holding a voter referendum in 2009;
    • Imposes a back-end referendum on future school tax increases that exceed an inflationary index (with 10 exceptions for certain costs such as special education, health care and pension obligations).
    • Requires school boards to form local tax study commissions of five, seven or nine members of the public to study the district’s current tax structure and make a non-binding recommendation on the imposition of a local EIT or PIT to provide property tax relief.
    • Establishes a Task Force on School Cost Reduction, appointed by the Governor and legislative caucus leaders in the House and Senate, to make recommendations on how to reduce current and future school district costs.
    • Repeals Act 72 of 2004, The Homeowner Tax Relief Act, which was signed into law by Governor Rendell on July 5, 2004.

The following links provide information about Act 1 of 2006:

Pennsylvania Department of Education

Pennsylvania School Boards Association

Pennsylvania Association of School Business Officials

Pennsylvania Association of School Administrators

Special Session on Property Tax Relief
The Evolution of Act 1 of 2006
(legislative activity tracked in the EPLC Education Notebook)

Establishment of Special Session on Property Tax Relief (Sept. 2005)

Opening of Special Session (Sept. 2005)

House & Senate Activity (Week of Oct. 21, 2005)

Senate Committee on Legislation Hearing (Week of Oct. 28, 2005)

House & Senate Activity (Week of Nov. 4, 2005)

House & Senate Activity (Week of Nov. 18, 2005)

House & Senate Activity (Week of Nov. 23, 2005)

House Activity (Week of Dec. 9, 2005)

House & Senate Activity (Week of Dec. 16, 2005)

House Activity (Week of Dec. 22, 2005)

Senate Committee on Legislation Hearing (Week of Jan. 9, 2006)

House & Senate Activity (Week of Jan. 27, 2006)

Senate Activity (Week of Feb. 13, 2006)

House Activity (Week of Feb. 16, 2006)

Appointment of Conference Committee (March 2006)

Conference Committee Organizational Meeting (April 2006)

Conference Committee Meetings (Week of Apr. 10, 2006)

Conference Committee Meetings (Week of Apr. 14, 2006)

Senate adoption of Conference Committee Report (May 2, 2006)

House Activity (Week of June 2, 2006)

House adoption of Conference Committee Report (June 14, 2006)

Signing of Act 1 by Governor Ed Rendell (June 27, 2006)

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