Audit shows many don't receive Pa. tax break

HARRISBURG - A new audit has found that at least 100,000 Pennsylvania homeowners - and perhaps as many as 300,000 - who qualify for a property-tax reduction from slot-machine revenues have not received it.

Auditor General Jack Wagner said yesterday that a cumbersome and complicated application process - and lack of oversight by the state - has resulted in many eligible homeowners failing to apply for the tax break.

Under Act 71 of 2004, a percentage of slots revenue was designated for property-tax reduction for owner-occupied homes in all counties, except Philadelphia. City residents receive automatic wage-tax reductions in their paychecks. The audit did not cover those paying wage taxes.

So far, least 2.7 million homeowners have collected $1.7 billion in property-tax reductions. (The Rendell administration cautions that not all counties reported participation rates.)

But because the onus is on the homeowner to apply for a tax break, many people don't do so for various reasons. They might be unaware of the program or ignore the application form mailed to them by their county.

Wagner said confusion over the antiquated choice of wording on forms inviting property owners to apply through their counties for a "homestead or farmstead exemption" had prompted many to simply ignore the application.

In addition, he said, because the refund money gets funneled to the counties to be disbursed, no single state agency is in charge of the program.

"This system must be corrected, and it must be made fair," said Wagner at a news conference.

He said the average size of a homeowner's annual reduction was $189 (a figure the administration says is closer to $196). That number could go as high as $300, Wagner said, when all 14 licensed casinos are up and running.

Wagner, a Democratic candidate for governor this year, said he was not pointing the finger of blame at anyone but was only trying to raise awareness.

But he did chide Rendell administration and the Gaming Control Board for "overstating," for a time, the amount of revenue disbursed for tax reductions at $2.1 billion, or $400 million higher than his audit found. He added that, in recent months, that figure had been corrected.

Gary Tuma, spokesman for Rendell, praised the audit for bringing attention to the property-tax reduction program, which he says has been growing each year.

He said that because of the way the money is distributed, several state agencies, including the Departments of Revenue, Education, and Community and Economic Development, need to be involved.

Wagner urged the legislature and Rendell to extend the deadline for new applicants from March 1 to April 15. He also recommended the designation of one agency, preferably the Department of Revenue, to oversee the property-tax reduction program. Tuma said the administration would consider the idea if it would help simplify the process and improve communication with the public.

Homeowners who are unsure whether they have filed a property-tax relief application or whether they are receiving their reduction should check with their county assessor's office.

To find out how to obtain an application, go to the auditor general Web site (www.auditorgen.state.pa.us ) or call 1-800-922-8477.

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