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Some Chambersburg property owners to see property tax reductions

June 12, 2008|By DON AINES

CHAMBERSBURG, Pa. -- The 16,350 property owners in the Chambersburg Area School District with homestead and farmstead exemptions will each see $613.08 in property tax reduction in the 2008-09 school year, a result of the local earned income tax offset and slot machine revenues from the state.

For 1,479 of those homestead and farmstead properties, the property tax bill for the upcoming school year that begins July 1 will be zero, Business Manager Rick Vensel said. That is because the tax bill on their homes will be less than the $613.08 in reductions for which they qualify.

The Chambersburg School Board Wednesday passed a $102,842,056 budget for next year that raises property taxes 4.07 mills to 80.98 mills, or $80.98 on each $1,000 of assessed value.

For a property with a market value of $100,000, the real estate tax would be $793.60, or $39.89 higher than 2007-08, according to the budget summary. Homestead and farmstead exemptions are only available to primary residences, not to commercial, industrial, rental housing or tax-exempt properties, Vensel said.

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Owners of those ineligible properties will continue to pay the full property tax, along with those homeowners who did not apply for homestead and farmstead exemptions. There are more than 29,000 properties in the district, and Vensel said a few thousand homes might still be able to qualify for homestead exemptions in the future.

The exemptions first went into effect in 2007-08 when there were 14,909 in the district. When the opportunity became available late last year through March for others to sign up, 1,441 more homes were added to the list, an increase of less than 10 percent.

"I had expected a 25 percent bump or more" as word of the tax reductions became more widespread, Vensel said.

The tax reductions were made possible by the state's Act 1 school property tax law that allowed districts, with voter approval, to shift some of the tax burden away from real estate to earned income taxes. A tax commission recommended and district voters approved increasing the income tax from 0.5 percent to 1.2 percent. That 0.7 percent increase is expected to generate more than $8.3 million for property tax relief.

The district's share of slots money from the state was $1,341,134, split equally among the 16,350 properties with exemptions.

For some higher income households, the increase in earned income tax will be more than the real estate tax reduction. People who rent homes or apartments pay the higher earned income tax, but receive no benefit from either the homestead exclusions or slots money.

Chambersburg was the only one of six districts in Franklin County - and a handful among the 501 in Pennsylvania - that approved its Act 1 referendum.

Senior citizens in the district who are income-eligible for the state's property tax rebate program could see additional property tax relief. In some cases, a senior citizen or couple with a house valued at $150,000 conceivably could pay no school property taxes, he said.

County and any municipal real estate taxes still have to be paid on all properties, Vensel added.

In the other districts, those homeowners who qualified for and received homestead and farmstead exemptions will see a reduction based on the amount of slots money those districts receive.

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