HARRISBURG -- The formula for distributing $1 billion in gambling-financed tax cuts would create vastly different scenarios for who gets what among millions of Pennsylvania homeowners and people who pay Philadelphia's wage tax.
The legislation, which lawmakers passed Wednesday night and Gov. Ed Rendell is expected to sign, would provide an average property tax cut of about 17 percent.
But the bill directs varying amounts of money to different categories of people. Age, address and income will help determine many outcomes, with lower-income seniors and homeowners in poorer districts, such as Allentown, Lancaster and York, getting the most.
For some senior citizens, the $1 billion in annual revenue anticipated from slot-machine gambling could wipe out their entire school tax bills.
Meanwhile, some homeowners with property tax bills of $2,500 or more would get $200 or less while others could pay more in overall taxes if voters in that school district choose to raise the local wage tax as another way to cut property taxes.
In general, the gambling money would lower property taxes by $200 for a homeowner whose property is taxed at the state average of about $1,475. The money also is expected to increase average rebates under the Property Tax & Rent Rebate Program for lower-income seniors and disabled people from about $380 to $500 a year.
In Philadelphia, the gambling money would be used for a wage-tax cut instead of property tax cuts. Determining the average tax cut there, however, is difficult because nobody knows how many people actually pay it.
Initially, the only benefit would be in the rebate program beginning in the 2007-08 school year.
The tax cuts for other homeowners hinge on the 14 slot-machine gambling licenses that were expected to be awarded later this year. If that schedule holds, the slots parlors could be producing $1 billion annually for tax cuts by 2009 or 2010. Less money means proportionately smaller tax cuts.
One wild card will be the extent to which the state's 3 million homeowners sign up for a share of the gambling money. State officials believe that fewer than 100 percent will sign up, making more money available for those who do.
Next year, each school district -- except Philadelphia, Pittsburgh and Scranton, where wage taxes are already comparatively high -- would have to ask voters whether to offset additional property tax cuts of at least 25 percent by increasing local wage taxes.
The biggest winners will include suburbanites who work in Philadelphia and low-income elderly homeowners in higher-tax districts.
Some examples, based on figures provided by legislative budget analysts from both parties:
A homeowner in Radnor Township in suburban Philadelphia would get a property tax reduction of $280 from gambling money. If that person commutes to Philadelphia for work, he will also get a cut in the wage taxes he pays to the city. And if the school board cuts property taxes further by increasing the local wage tax, that person will get an additional property tax cut of at least $1,275, while the increase in his wage tax will be offset by a special payment of gambling dollars because he already pays Philadelphia's wage tax.
A retiree 65 or older who lives in Bellefonte and has an income of $12,000 under the rebate program would get a property tax rebate of $500. Like any homeowner in that borough, he also will get a property tax cut of about $250. And if his property tax bill is 15 percent or more of his income, he then would qualify for an extra $250 rebate.
Conversely, some people could pay more in taxes, or receive only a tiny adjustment:
A homeowner who makes $100,000 and lives in Penn Hills would pay about $435 more if voters there approve a tax shift. That person would pay $1,000 more in wage taxes, wiping out the combined $565 property tax cut.
In the Lake Erie town of Fairview, gambling money would provide a $105 tax cut for a homeowner with the average property tax bill of $2,020.