With school districts trying to save money, is it end of an era for tax …
In her family’s small-engine repair shop in Washington Township, among the lawn mowers and oil, Jaci Thoman has collected local taxes for five years to supplement her income and help build the business.
But the days of the local tax collector — many of whom work out of their homes — could be numbered.
Thoman usually is busy this time of the year, mailing the Dover Area School District tax bills to property owners, answering questions about those bills and collecting payments.
This year, the elected tax collector has turned the duty over to the school district. That’s because the school board decided last year to drastically reduce the compensation for its tax collectors after finding that a bank could collect for much less.
Instead of receiving $1.65 per tax bill and 90 cents for a per capita bill, the tax collectors in the Dover district will earn 50 cents per bill that’s mailed and collected. Thoman estimated she’d earn $1,400 for collecting nearly $3 million in taxes versus about $3,200 after taxes last year.
“That’s why I joke I may as well go to McDonald’s and get a job,” she said. “I could work less hours, have less aggravation and make more money.”
And she’s not alone. The Spring Grove Area School District also is driving a hard bargain: Either earn less for school taxes or turn collections over to the district.
“I opted out of collection because the rate was too low,” said Teena Hoy, tax collector for North Codorus Township.
State law requires that elected tax collectors collect the municipal and school taxes. Some view that system as antiquated and inefficient and want to see it changed.
Some districts in the state are slashing tax collector pay per bill. They’ve discovered banks or tax collection services can do the job cheaper.
districts are forcing tax collectors to make a choice.
Others, including legislators, wonder whether all taxes — including municipal and county — couldn’t be collected more efficiently, perhaps on a countywide basis, as is done in other states.
Those changes have sparked lawsuits, including one in Dover, questioning whether the districts have abused their discretion.
Now the issue has reached the state Legislature.
The state Senate recently directed the Legislative Budget and Finance Committee — a non-partisan, quasi-governmental group that works for the General Assembly — to study the impact and cost-savings of consolidating property tax collection.
State Sen. Mike Waugh, R-Shrewsbury Township, was one of the co-sponsors. He could envision, for example, a countywide system to increase efficiency and help save money for local governments and school districts.
“I think the day of the local tax collector is waning,” he said.
School districts look to cut costs
In facing tight budgets in a down economy, school districts have been looking for ways to reduce costs.
Every four years, school districts must set the compensation for tax collectors before candidates run for the job. The Dover school board asked a couple years ago whether a better alternative existed.
Belinda Wallen, the business manager for the district, proposed using a “lockbox” at a financial institution as other school districts have done. In that setup, the payments are mailed to a post office box, and the bank processes the checks and deposits the money into the district’s account. It’s similar to how mortgage, utility and other bills are paid.
It would save about $32,416 — the salary of a first-year teacher, Wallen said. It also would help streamline the process using technology.
Wallen recommended setting the tax collectors’ compensation at 25 cents per bill sent and 25 cents per bill collected. The board approved.
“Our job as a board is to make those funds go as far as possible,” board President Bryan Rehm said.
It would then be up to the district’s three tax collectors to decide if they’d continue collecting school taxes.
Two of them — Kristine Keener of Dover Township and Samuel Herman of Dover borough — decided to keep doing the job for the district. Thoman was the only one who declined.
The district will use a lockbox for residents in Washington Township, Wallen said. Residents can pay their bill either through the mail or in person at the Dover or East Berlin branches of Susquehanna Bank.
Spring Grove Area School District also reduced compensation for tax collectors this year from $1.80 cents per real estate bill and $1.25 per capita bill to 40 cents per bill.
Four of the eight tax collectors have decided not to collect the school taxes this year, business manager George Ioannidis said.
Spring Grove will use a lockbox to collect the taxes for residents who live in Paradise and North Codorus townships as well as the boroughs of Seven Valleys and Jefferson.
Ioannidis, who just completed his first year with Spring Grove, previously worked in two school districts in Lancaster County that have been using the lockboxes since the 1990s. The districts can provide as much service as the tax collectors — if not more, Ioannidis said, adding that districts offer more business hours than most tax collectors.
Southern York County School District has had a long-standing history of collecting its own taxes, said Wayne McCullough, director of administrative services.
It’s been so long that McCullough, who has been with the district more than 20 years, doesn’t know how it started. Southern hasn’t had problems, and the job hasn’t required additional staff, he said.
Districts can save considerable money by collecting their own taxes, he said.
‘The general information center’
Tax collectors say their job entails more than collecting the money and turning it over to the county, municipality or school district. They handle interim bills when a resident adds a pool, deck or other addition to a home. They certify whether the taxes have been paid on a home when it’s being sold.
They deal with mortgage companies, which are responsible for paying property taxes for homeowners who have money put aside in an escrow account.
And they answer a lot of questions from the people who elected them.
Margaret Cousler, who has been a tax collector in Springettsbury Township for 45 years, said she received three calls on a recent afternoon from residents wondering how they can have their properties reassessed. She told them to call the county assessment office.
Questions range from who are the supervisors and when do they meet to what’s planned on the entertainment schedule at the township park, she said.
“We’re kind of the general information center,” she said.
Tax collectors do not receive benefits, such as health coverage, sick days or vacation time. They have to pay for their phone and office supplies, such as fax machines and copiers.
“If I did not have this job at home, I wouldn’t have a land line,” said Catherine Bilger, the elected tax collector for Peach Bottom Township.
Bilger, who also serves as the township manager, said she pays for a separate telephone line at the municipal building so she can answer tax questions. It’s common in the southern end of the county to get questions from Maryland transplants who don’t understand how Pennsylvania’s tax collection system works.
Tax collectors take some abuse, too, even though they don’t set the tax rates.
One man threatened to pay his school taxes in rolls of pennies, Bilger said.
Another slapped the bill and a check on the counter and told Bilger: “I hope you’re happy with this.”
But that’s the job they were elected to do, Bilger said.
Study to look at consolidation
Two years ago, the state Legislature approved consolidating how the Earned Income Tax is collected. It requires countywide tax-collection districts by the end of 2012.
That law doesn’t have as much impact in York County because the York-Adams Tax Bureau already collects the wage taxes for many of the municipalities.
One of the arguments for consolidating the earned income tax was that it was difficult to deal with so many collectors.
Some of the same arguments can be made for consolidating the property tax system as well, Waugh said. The legislature is now studying whether it’s worth consolidating property tax collection.
Some of the 72 municipalities in York County, such as Railroad, do not have tax collectors. The communities struggle to find someone to do the job.
Some people, including Wallen, Dover school district’s business manager, said they support exploring consolidation to help save money.
If a tax collector becomes ill, it’s difficult for someone else to pick up the work, Spring Garden Township manager Greg Maust said. A centralized point would offer additional resources to continue the service.
Cousler, the Springettsbury Township tax collector, agrees that consolidation likely is coming, but she said having it at the school district level might make more sense.
Some people still like to pay their taxes in person, tax collectors say. They want a stamped receipt. It would be a long distance for residents in the corners of the county to travel to York to pay their taxes, should the county take over the service, Cousler said.
Bilger, who grew up in Maryland where government services are centralized, said bigger is not always better. She points to the roads as an example. The worst ones in Peach Bottom Township are maintained by the state, she said.
If real estate tax collection is centralized, it might be best-served at the county level because the assessments are done there, said Lois Kashner, administrator with the York-Adams Tax Bureau. The bureau would have to add a whole new department to handle that.
York County Commissioner Doug Hoke said he thinks changes to property tax collection are worth a study, and he’d like to see what the recommendations would be.
State Sen. Pat Vance, R-Camp Hill, said she supports the study looking at consolidation. It will look at how other states handle collection. The results, which are expected within a year, may show that consolidation would result in savings.
“That’s the beauty of doing the study,” she said.
3 TAX COLLECTORS SUE OVER DISTRICTS’ PAY DECISIONS
Three tax collectors filed a lawsuit against the Dover Area School District last fall after the school board lowered the compensation rate by 70 percent.
Until this year, tax collectors received $1.65 per tax bill and 90 cents for each per capita bill. Now they earn 25 cents for each bill mailed and 25 cents for each one collected.
If a financial institution is willing to collect for 50 cents, why should the district pay tax collectors a greater amount, business manager Belinda Wallen asked.
The tax collectors — Kristine Keener of Dover Township, Jaci Thoman of Washington Township and Samuel Herman of Dover — argued that the district’s calculation of the “true value of service” was limited to depositing the tax money quickly into an account.
It does not factor in the duties of the tax collector, including providing customer service and assistance to the people who elected them.
“(The school board members) just slashed the amount of compensation to get them out,” the tax collectors’ attorney, Shane Kope, said.
The school district argued in its response that the tax collectors knew what the compensation rate would be before they ran for office. The compensation rate has to be set before the election.
The case is similar to one in Bucks County, in which two separate school districts were sued by tax collectors over the cut in pay.
A judge in Bucks County ruled in favor of tax collectors. School districts would have to look at what other districts are paying tax collectors — not the cost of the use of a lockbox or collection agency — to determine market value, said Michael Savona, an attorney who represents the tax collectors.
However, the state Commonwealth Court reversed the lower court’s decision, saying compensation is at the school district’s discretion.
The tax collectors in Bucks County have now asked the state Supreme Court to hear their case, Savona said. The recent ruling would allow every taxing entity to write its own rules.
“For now, we’re on very solid ground,” said attorney Phil Spare, who is representing the Dover Area School District.
LAWS MAKE REMOVING A TAX COLLECTOR DIFFICULT
Former Spring Garden Township treasurer and tax collector Melissa A. Arnold has been under investigation by the state police and FBI over the alleged misuse of taxpayer funds, according to court records.
She appointed township manager Greg Maust to fulfill her duties, and when she won re-election last fall, she declined to take the position.
Springettsbury Township tax collector Margaret Cousler fell ill several years ago, and she was late in turning over money to some of the taxing authorities.
Had Spring Garden or Springettsbury Township wanted to get rid of their tax collectors, they would have found it cumbersome under the laws designed to protect the elected officials from being removed from office.
Tax collectors can be removed one of three ways:
— Impeachment in the General Assembly.
— By the governor for reasonable cause after due notice and full hearing on the address of two-thirds of the Senate.
— By the courts after conviction of misbehavior in office or of any infamous crime.
Some tax collectors are very good at their jobs, but others don’t do so well, Stock and Leader attorney Phil Spare said. He’s the solicitor for an out-of-county school district that lost money after the tax collector was suspected of embezzlement. The tax collector resigned, and no charges have been brought to date, Spare said. Among all the taxing entities, about $300,000 was missing.
Taxing districts should know what they should be getting year in and year out, said Elam Herr, assistant executive director of the Pennsylvania State Association of Township Supervisors.
If that amount doesn’t come in, they need to question why. Tax collectors need to reconcile their books at the end of each year.
Spare is representing the Central York and York Suburban school districts in their attempt to recoup the loss of potential earnings from the money that Cousler turned over late.
Cousler said everything was squared away with the districts. She said she hasn’t heard from them, and the money was in an interest-bearing account.
In taking over the Spring Garden collections, Maust said one of the problems he found with the system is that in a first-class township, the tax collector also is the treasurer. It was challenging to carry on day-to-day duties of the position after Arnold left, he said.
In second-class townships, the duties are separated and include an appointed treasurer. He would welcome that change for the first-class townships.
“We’re hoping we don’t have another experience down the road,” he said. “It’s been very difficult.”
–Teresa Ann Boeckel
WHAT THEY MAKE
How much tax collectors make varies greatly. Tax collectors locally collect for the county, school district and municipality, but they can collect other taxes as well.
Karin Krebs, the City of York treasurer, is responsible for collecting taxes. She receives a salary of $28,000 a year.
Margaret Cousler, longtime tax collector in Springettsbury Township, received about $53,789 last year.
Rosemary Smith, tax collector for West Manchester Township, earned about $42,286 last year.
WHAT ARE THE QUALIFICATIONS?
People who run for tax collector need minimal qualifications.
But the state does offer a voluntary program that includes basic training, examination and qualification.
The following tax collectors in York County are qualified under the program to serve as tax collectors anywhere within the state:
— Carol Ambrosius of Manheim Township
— Melissa A. Arnold of Spring Garden Township
— Margaret E. Cousler of Springettsbury Township
— Kay Crumling of York Township
— Kathy S. Emswiler of East Manchester Township
— Patricia A. Gordon of Fairview Township
— Catherine Gutberlet of Loganville
— Jill Heindel of Windsor Township
— Kristine Keener of Dover Township
— Karin J. Krebs of the City of York
— Abby Latchaw of Conewago Township
— Karen M. Little of Penn Township
— Donald Murphy, retired City of York treasurer
— Debra Popp of Goldsboro, York Haven and Newberry Township
— Marcy K. Renshaw of Warrington Township
— Laura Shue of Hellam Township
— Jean Stambaugh of Manchester Township
— Jaci Thoman of Washington Township
— Leroy E. Wentz of Hanover.
Source: Department of Community & Economic Development
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