Bravo for expanding the property tax/rent rebate program. Now let’s find a better way to fund it. – Pennsylvania Capital-Star
Gov. Josh Shapiro and members of the General Assembly are taking a victory lap around Pennsylvania touting the expansion of the commonwealth’s Property Tax and Rent Rebate program.
There’s a great deal more to this legislation than the expansion of a popular program for low-to-middle income seniors, however. It speaks to the use of lottery revenues to fund benefits for older citizens. It speaks to the accelerating demographic change in Pennsylvania as our population ages. It speaks to attempts to make our regressive tax system more progressive. And it speaks to the continuing debate about financing public education in the commonwealth.
Shapiro signs expansion of property tax rent and rebate program
The property tax/rent rebate program is paid for by the Pennsylvania lottery. Since its establishment in the 1970s, lottery revenues have been used exclusively to benefit older Pennsylvanians, and the first program created was the property tax relief program.
Over the years, the commonwealth has expanded the use of lottery revenues to create our pharmaceutical assistance program, assist older citizens with transportation needs, and fund local Area Agencies on Aging. All of these initiatives are critical for the health and well-being of seniors.
But it is not good public policy to rely solely on revenues from lottery sales to pay for these programs. Only those who purchase lottery tickets contribute to this fund. And studies have found those who habitually play lotteries are often those who struggle financially.
The argument can be made that without lottery revenues this assistance would not be available. But that gives Pennsylvania elected officials a pass on making tough spending decisions. Governors and the General Assembly have used the fantasies of those Pennsylvanians looking to win the latest gigantic Powerball or MegaMillions jackpot to avoid asking all citizens of the commonwealth to contribute to needed programs for the elderly.
Lottery funding made the latest boost to the property tax/rent rebate program an easy yes vote for even fiscally regressive state lawmakers. The governor’s budget document shows the Department of Revenue will be able to absorb the projected $170 million cost of the expanded property tax/rent rebate program through adjustments to the lottery budget (for example, spending $0 on new lottery equipment in 2024-25 after spending $92 million in 2023-24).
But that may not hold true in the future. Although the lottery has done a remarkable job increasing sales to increase revenue, the demographic realities of the commonwealth are going to catch up. Older Pennsylvanians will make up a larger proportion of our population in the coming years, which will increase the need for, and the cost, of programs like the property tax/rent rebate program.
If lottery revenues cannot pay the full cost of these programs in the future, funding will need to come from other sources. And this brings the debate about funding programs for older Pennsylvanians back to our elected officials. If they wish to continue these needed benefits, some funding for the property tax/rent rebate program will come from the commonwealth’s general fund, which will mean all taxpayers will contribute to lowering the tax burden on a group of people who can least afford taxes.
Obviously, this is just a tiny step toward establishing a more progressive Pennsylvania income tax system, as it applies only to the older population. But it does show a path forward for creatively finding ways to get wealthier Pennsylvania of all ages to pay their fair share toward the common good.
That path should begin with public education funding. The property tax/rent rebate program is little more than a Band-aid trying to heal the gaping wound of how to fairly fund public education in Pennsylvania. Under the new legislation, eligible older residents will receive between $380 and $1000 toward their property taxes, with most getting lower amounts.
Any assistance should not be scoffed at, but for many residents of the Commonwealth, $380 is a small proportion of their overall property tax bill, which has increased over the past few years as costs for public schools have risen. Lawmakers must recognize the real solution to fair public education funding has to come at the state level and it must come from everyone, not just people buying a scratch-off lottery ticket at a convenience store.
Alone, the expansion of the property tax/rent rebate program will not solve any of these big issues lawmakers need to address in the commonwealth. But it will immediately help thousands of older Pennsylvanians with a portion of the costs of remaining in their homes and it provides an opening to begin a debate about how to fairly fund necessary programs. These are good reasons to join the lawmakers who pushed for this legislation in their celebrations.
Originally published at www.penncapital-star.com,by Ray Landis