While Allegheny County property owners already are receiving letters saying school tax relief is coming, it remains unclear just how large the gambling-funded reductions will be.
And because the money comes with strings attached, it's far from certain that all school districts will choose to receive it.
"It is by no means a slam dunk that it is in the best interest of districts to opt into the system," said Chris Berdnik, director of finance for Pittsburgh Public Schools.
Under the Homeowner Tax Relief Act signed by Gov. Ed Rendell July 5, school districts must decide by May 30 whether to join a gambling revenue-sharing program.
Districts receiving the money would be required to offset the property tax revenue loss by increasing wage taxes by 0.1 percent and would have to seek voter approval of many future property tax increases.
Property owners can benefit only by applying for the tax relief program that is described in the mailers.
Residents who have qualified for homestead tax exemptions automatically will be awarded reductions if they happen. Those homeowners are getting only a notification about the program.
Taxpayers not currently qualified for such an exemption are receiving applications that must be returned by March 1, or they will not be eligible for relief.
School boards will have to decide if they want to raise wage taxes to reduce property taxes, weigh differing effects on homeowners versus renters and examine other considerations before deciding whether to accept gambling money.
"I guess each individual school board is going to have to determine if that's best for their district or not," said Alan Bennett, business manager at Moon Area School District.
Business officers at several local districts said joining will not change schools' bottom lines because any new revenue from gambling and wage taxes has to be used for an equal reduction in property taxes.
"Whatever money comes in has to go right back out," said David Hall, director of fiscal management and support services at North Hills School District.
The new law asks school boards to fundamentally change how districts get their money.
Joining the revenue-sharing program requires districts to submit to voter referendums any future property tax rate increase that is above a state-determined inflation level. Some officials see this as giving up their financial authority.
"I will tell you overwhelmingly that the part of the process that is onerous to the school districts is the referendum question," said Pat Sable, a finance expert at the Allegheny Intermediate Unit, the regional education group that mailed the tax relief notices.
Bennett said requiring districts to submit tax increases that are higher than the state inflation index to voters probably limits increases, because of the unpopularity of tax hikes.
How taxpayers will fare will vary by district, household income, property value and other considerations. Part of the problem is no one knows how much money gambling will rake in, and thus how much money there will be in the pot for sharing.
The state will not begin sharing money until it collects $500 million in gambling cash, and the state Gaming Control Board that will decide where slot machines will go has yet to hold its first meeting. Tax relief for participating districts is not expected until at least 2006.
"In talking with school boards, almost all of them are telling me they want more information," said Tim Allwein, director of government and member relations for the Pennsylvania School Boards Association.
Property owners would get tax relief on a sliding scale from 7.4 percent to 60 percent depending on how much money gambling generates.
Gov. Ed Rendell's office estimates the average cut will be 23 percent, or about $333 for every homeowner.
Using rough estimates from Republican state lawmakers, Hall and Bennett said property owners in their districts likely will see only modest gains when the 0.1 percent wage tax increase is figured in.
Hall put the average North Hills property tax cut at $150 to $250 a year, compared to a possible average wage tax increase of about $60.
Bennett said an average Moon family could get just under $200 a year in property tax relief, but pay about $100 more in wage taxes.
Both caution the numbers are very rough estimates.
Berdnik and Bennett agreed that gambling revenue-sharing does more to shift tax burdens from property taxpayers to wage earners than it does to reduce the overall tax burden.
"You're just asking different people to carry the load," Bennett said.
Regional and local education officials say they know of no Allegheny County school board that is close to deciding whether to join the program.
"It's still very, very early in the process," Hall said. "Lawyers are still analyzing the bill."
