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The good news is that the number of seniors getting a property tax break in the city is soaring.
The bad news for seniors is that the break is generally not as good as last year's. It's an average of $111 less.
City Council members who set these changes in motion say they can fix this so the tax break remains easy to get and is perhaps more sizable -- next year.
"We can change the formula," Councilman Patrick Dowd of Highland Park said. "It'll be good."
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Councilman Ricky Burgess, whose district stretches from Garfield through Homewood to the East Hills, said this new system allows seniors whose home had decreased in value to get a break for the first time.
Now that they have the data, they pledge to figure a way to restore a better break.
These proposed fixes have been set in motion because John and Mary Ganter, who have owned a home in Banksville for 44 years, saw their city property taxes go up $311 this year. When Mr. Ganter asked the tax office why, he was told in that impeccable logic of the bureaucrat that his taxes didn't go up; his discount went down.
I shared the Ganters' story here March 7. City Treasurer Margaret Lanier promised to provide a citywide overview and, true to her word, she e-mailed a chart this week. Some highlights:
• The city gave out $123,000 less in Act 77 Tax Relief for Seniors in the first two months of this year compared to the same period last year, so that's a windfall to city coffers at seniors' expense.
• This came despite many more homeowners getting a break. The number of participants rose from 3,997 to 5,743 -- a 44 percent increase.
• Despite its popularity, the city still nets more money because the tax break is much less almost everywhere you look. In 31 of the 32 wards, the average tax reduction was down. The average difference was as much as $427 in the 22nd Ward (that takes in the revitalized Mexican War Streets and Allegheny West) and as little as $22 in the 5th Ward (the Hill District.)
• The only place where the average break is higher is the 2nd Ward, which includes Downtown and part of the Strip District. There, eight senior homeowners are getting an average tax break of $215, and nobody even signed up for a break last year.
Mr. Dowd pushed for a change in the law last year after constituents suggested easing the process. It took months, but council passed a bill to simplify the application so it lined up with the Allegheny County form, and also to make renewals automatic. Once you're in, you're in.
All seniors with household incomes under $30,000 are eligible. The age minimum was raised from 50 to 60 this year, though those who had been eligible for the break were grandfathered in (a term particularly appropriate here.)
Tighter age rules shrank the eligibility pool, yet the number getting the discount soared. So Mr. Dowd is pleased the goal to increase participation was met.
The reason the average break decreased is that, previously, some seniors got a discount based on their home's 1993 value and some on the 2002 value. The '93 crowd often got a better deal, and that's illegal. Property taxes must be uniform (not that they ever are in Pennsylvania).
So all breaks were moved to the 2002 value. That way, anyone whose house lost value since 1993 could finally benefit. Mr. Burgess said that, under the old system, a homeowner in a declining neighborhood might actually pay more with the senior discount because it was based on 17-year-old values.
It's possible that distortion was remedied. There was no data on overall tax bills for seniors, only on the size of these tax breaks, but at least 6,000 more dollars have been given in these breaks in Mr. Burgess' district this year. That's with at least 176 new participants.
In contrast, in most of the city, the treasury has kept more dollars through this change and "the goal is not to see that the city budget is fixed," Mr. Dowd said, "it's that seniors get tax relief."
Senior homeowners have until June 30 to apply for relief. More seniors surely will come aboard. The treasury windfall should shrink as more tax breaks are dispensed. When the dust clears, if the city is still taking in more dollars from seniors than a year ago, council should look into a greater discount for 2011.
What's billed as a better break shouldn't become a government windfall.
