Studying tax collector options fiscally prudent
Mount Carmel Borough Council President Tony Matulewicz minced no words in giving his opinion on how much the borough pays its tax collector. He said it was "exorbitant," "ludicrous" and "absolute insanity."
Despite all that, he said it's nothing personal against Christopher Grayson. Instead, it's about a system that's outdated and in desperate need of change.
State law prohibits changing the compensation for tax collectors during their terms, so the opportunity to do so arises once every four years, as terms end. This is one of those years, and Feb. 15 is the deadline for counties, municipal governments and school districts to set compensation.
The Pennsylvania Economy League has done extensive research on tax collection costs and has found a wide array of compensation methods, many of them wasteful. The PEL recommends a flat salary rather than a percentage of taxes collected, per-bill charges or other methods. That makes sense, since tax payments are required by law, while collection is a procedural exercise.
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To demonstrate how varied collection rates are - even for the same taxing bodies - consider what Matulewicz has pointed out in Mount Carmel: In 2012, the borough paid Grayson 3.5 percent for every individual real estate, per capita and occupation assessment bill he collects. The total for the year was $25,636.07. Meanwhile, Mount Carmel Area School District, which pays Grayson $1.25 commission on every real estate tax bill and $1 commission on every per capita and occupation assessment tax bill, paid him $5,908.25 to collect its taxes in 2012, and Northumberland County, which pays $1.50 for every real estate tax bill and $.25 for every per capita and occupation assessment tax bill, paid him $6,282.75. Combined, the school and county total isn't half what the borough paid.
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We don't dispute Grayson's contention that he puts in a full week's work for the collection and tries to accommodate taxpayers at all hours. But who can blame the borough for studying its options as it looks to save public money at every corner? Not only are the school and county rates better, the borough has a proposal from a bank to do the work for just $4,200 a year.
With the clock ticking toward Feb. 15 before a four-year window closes, all local municipalities should study what they pay their tax collectors and see if there is money to be saved.
Worth noting is that wage tax collection statewide has been converted to a new system, under which the number of collectors has been reduced from about 560 to just 69, saving more than $200 million a year in collection costs. The state Legislature, recognizing cases such as Mount Carmel's, should pass a similar law for property tax collection, setting rates, eliminating redundancy and saving even more money.