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School Districts Take Advantage Of Tax Loophole

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Jun 26, 2009 7:32 pm US/Eastern

School Districts Take Advantage Of Tax Loophole

Reporting
Jon Delano
PITTSBURGH (KDKA) ― Next Wednesday, July 1st 2009, marks the start of the next fiscal year for most school districts.

For lots of homeowners that means higher school property taxes; however, the money brought in from casino gaming was supposed to give every homeowner a tax break.

But as it turns out, many school boards are taking advantage of a giant loophole.

Some $613 million of casino gaming money is being redirected back to school districts this coming school year.

Here's the way it works:
Every school district in Pennsylvania gets some of the casino gaming money.

In Mt. Lebanon, for example, it's $1.7 million. Officials say that money is supposed to be used to reduce property taxes on homeowners.

But some school districts are raising their millage rates to recapture part of that revenue - and it is all perfectly legal.

"There's nothing preventing the people who levy your taxes from increasing them," says Eric Montarti, of the Allegheny Institute for Public Policy.

"Taking that money essentially, yes; raising your millage rates in order to eat away at the gaming money, there's nothing that prevents that," he adds.

While some school districts have cut taxes like Baldwin, North Hills and McKeesport, others have held taxes the same like Keystone Oaks, North Allegheny and Penn Hills.

But many more have raised millage rates like Avonworth, Canon McMillan, Fox Chapel, Mt. Lebanon and Upper St. Clair.

"It's not fair. I think it is way out of line," said Tom Volovich, of Mt. Lebanon.

Fair or not, Montarti says it is happening.

"If districts keep raising the tax rates without any control, then the gaming money will be diminished as a way to reduce school taxes," he says.

Some school boards argue that without the gaming revenue your school property taxes would go up a whole lot more.

But the bottom line is that except for those districts that cut taxes - or held the line - most of us will pay higher school taxes this year even as the casinos rake in a record amount of cash for the state.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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