Harrisburg, April 26, 2023 – State Sen. Jimmy Dillon (D-Philadelphia) and State Rep. Bob Freeman (D-Northampton) yesterday announced their proposal for amending the Pennsylvania Constitution to implement a property tax “circuit breaker”.
“This proposal would offer Pennsylvania homeowners needed property tax relief and build fairness into the property tax system by capping property taxes to reflect household income,” said Representative Freeman
The proposed amendment (House Bill 656 & Senate Bill 635) aims to prevent regressive taxes on working families by enabling the General Assembly to consider household income when assessing tax rates, thereby promoting equity and ensuring that homeowners pay taxes proportional to their income.
“Having an affordable place to live in a neighborhood with opportunities is the foundation for so much else in life,” said Senator Dillon. “This is especially relevant in today’s economy, when many families are facing financial challenges related to housing.”
The basic idea behind the “circuit breaker” approach to property tax relief is simple: Just like an electrical circuit breaker prevents a circuit from being overloaded with energy, this program will prevent low- and middle-income households from being overloaded with tax burden. If your property taxes are high relative to your income, you’d be eligible for a state tax credit that helps to offset some of that burden.
According to Marc Stier, Executive Director of the Pennsylvania Policy Center, “Pennsylvania currently has a limited version of this program, the Property Tax / Rent Rebate program. But this limited program only benefits Pennsylvanians 65 or older, widows and widowers 50 or older, and people with disabilities 18 and older. And only those with incomes below $35,000 for homeowners and $15,000 for renters benefit from the program. Governor Shapiro has called for expanding the program. However, what Representative Freeman and Senator Dillon are calling for today is a bolder program that would benefit far more Pennsylvanians.”
Specifics as to the income guidelines and other relief criteria will be determined through subsequent legislation. If this amendment passes it will allow the General Assembly to enact legislation detailing qualifications to exempt a taxpayer from paying a portion of their property tax that exceeds a percentage threshold amount of household income.