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Opinion: Homeowners and rent rebate program needs update

The popular property tax/rent rebate program administered by state Revenue of Department is in trouble and needs a long overdue update.

Many senior citizens in the five-county Times News region rely on this annual rebate of up to $650 to help make ends meet and to offset the ever increasing school real estate taxes in our local districts.

The rebate program benefits eligible Pennsylvanians age 65 and older; widows and widowers age 50 and older; and people with disabilities age 18 and older. The income limit is $35,000 a year for homeowners and $15,000 annually for renters, and half of Social Security income is excluded.

The maximum standard rebate is $650, but supplemental rebates for qualifying homeowners can boost rebates to $975.

The Property Tax/Rent Rebate Program is one of five programs supported by the Pennsylvania Lottery. Since the program’s 1971 inception, older and disabled adults have received more than $7.6 billion in property tax and rent relief. The rebate program also receives funding from slots gaming.

Property Tax/Rent Rebate application assistance is available at no cost from Department of Revenue district offices, local Area Agencies on Aging, senior centers and state legislators’ offices.

The problem is that the program has remained static for years, to the point where the number of eligible applicants has dropped every year since 2009 and is scheduled for another decrease this year.

The problem is that since the program is income-dependent, the income levels have not been updated in 15 years for homeowners and 35 years for renters.

This means, for example, that this year when there was a real spike in Social Security benefits, previously eligible applicants are now left out in the cold because they have too much income.

What is needed is some type of a cost-of-living escalator that allows the program to keep pace with rising benefits such as Social Security.

The Shapiro administration has made this issue a priority and has recommended some profound changes in the governor’s budget for this year. It is not as if this problem has not been on legislators’ radars, too, because there have been numerous bills over the past decade to fix the problem, but the bills get bottled up in House and Senate committees and never see the light of day.

Just for the record: I do not qualify for this benefit, but I know people in Carbon, Schuylkill, Monroe, Lehigh and Northampton counties who call it a “godsend” and rely on it annually.

It would seem logical if there is a cost-of-living adjustment built into the Social Security payments, there should be one for the state rebate program to have a similar escalator, especially since half of the Social Security income is calculated in determining whether someone is eligible for the rebate.

Even if legislators and Gov. Josh Shapiro come to an agreement later this year, the changes would not take effect until 2024, which means that an undetermined number of recipients who qualified up until last year, will not be eligible this year because of too much income.

In its analysis of the governor’s proposal, Spotlight PA reports that Shapiro’s plan would eliminate the difference between homeowners and renters and raise the income limit for both to $45,000 annually. By 2026, this income threshold would rise to $48,200. Shapiro’s budget also proposes raising the rebate by about 50% of its current level.

The way the program is set up, there is a sliding income eligibility scale. For example, to qualify for the full $650, a homeowner’s income currently cannot exceed $8,000. Those earning between $8,000 and $15,000 get $500, between $15,001 to $18,000, $300, and from $18,001 and $35,000, $250.

Shapiro’s proposal has the backing of Rep. Steve Samuelson, D-Northampton, chair of the house Finance Committee and longtime supporter of the program’s expansion. He said that these changes should have been made years ago.

Not everyone is on board with the program. There are expected headwinds in the Republican-controlled state Senate where some members are concerned that the escalators are not sustainable, especially when gambling revenues do not meet expectations, requiring the General Assembly to come up with the promised money from elsewhere.

By Bruce Frassinelli | tneditor@tnonline.com

The foregoing opinions do not necessarily reflect the views of the Editorial Board or Times News LLC.