Credit cards for property taxes? Bonuses for tax collectors who get the most property owners to pay their taxes?
These are some of the ideas that have been tossed around by Luzerne County officials who are desperate to boost the county’s tax collection rate.
If everybody billed paid their property taxes on time, Luzerne County would receive $86.17 million this year.
The amount received to date: $72.29 million.
The county’s budget won’t suffer because commissioners factored in only an 85.7 percent collection rate, or $73.8 million, and officials expect to receive that much by the end of the year.
But the county should be closer to a 95 percent collection rate, according to consultant Public Financial Management, which highlighted the county’s “weak” property tax collection performance in its recent financial recovery report.
The percentage of current-year taxes collected in 2004 was about 89.7 percent, compared to 86.5 percent in 2008, the report said.
County Budget/Finance Chief Tom Pribula said he thinks the county is doing a bit better than portrayed because the maximum collection amount doesn’t factor in an estimated $2 million in annual revenue lost through Keystone Opportunity Zones and tax-diversion programs that fund infrastructure.
If that $2 million is knocked off, the county’s budgeted collection rate would be closer to 87.7 percent.
Some counties now accept credit cards for property tax payments – an option being considered by Luzerne County, said county Commissioner Chairwoman Maryanne Petrilla.
“We are looking at accepting credit cards countywide, though it’s still in the exploratory stages,” Petrilla said. “We need to at least look at that option.”
The county would also consider credit cards for the payment of district judge fines and fees in many county offices, she said.
In response to the feedback from Public Financial Management, Pribula recently suggested lowering the pay of elected tax collectors and offering bonuses for those who obtain higher collection rates.
However, the opportunity to alter tax collector pay rolls around only every four years, and the county missed the Feb. 15 deadline, which means officials will have to wait until 2013.
Compensation changes must be made before the tax collectors start circulating their nominating petitions, and nobody proposed changes before the deadline.
The county spends more than $524,000 on 69 municipal tax collectors annually, county records show. The law only allows the county to collect its own taxes in cities or home-rule municipalities.
Tax collectors receive $3.50 for each bill that’s paid and $4 to process each remaining unpaid bill at the end of the year.
Former county commissioner Todd Vonderheid had proposed lowering tax collectors’ pay before the Feb. 15, 2005 deadline, but he couldn’t get a second vote after the tax collectors publicly objected.
Public Financial Management advised the county to connect more with municipal tax collectors because property taxes are “its largest and most critical revenue source.” The administration could prepare and share collection performance data and study successful collection strategies in other counties, the report said.
Hanover Township Tax Collector Mildred Luba, head of the county tax collectors’ organization, said tax collectors are willing to discuss ideas to get more people to pay, but county officials have to realize that some non-payers simply don’t have the money.
Another segment of property owners are perpetually behind, paying what they must to keep their properties out of back-tax sales, she said.
Luba said she used to send out hundreds of reminder letters but found that the response did not offset the expense of postage.
“You cannot make people pay their taxes,” she said.
A pay reduction for tax collectors would be unjust, she said, because tax collectors interact with property owners and take the time to address their questions and concerns. Luba said she has detected numerous property owners who were not taking advantage of the county’s homestead exclusion or the state’s property tax rebate.
“There is a lot of customer service,” Luba said.
She is urging her colleagues to pay attention to a proposed switch to county home rule because a new charter would allow the county to stop using elected municipal tax collectors.
Jackson Township tax collector Jackie Latosek said she personally calls property owners who have not paid to remind them.
The county collects its own taxes in three cities – Wilkes-Barre, Pittston and Nanticoke. The fourth city – Hazleton – and three home-rule municipalities – Kingston Township, Wilkes-Barre Township and Kingston borough – collect taxes on the county’s behalf.
The county Treasurer’s Office, which handles county collection in the three cities, has started sending reminder letters to more than 4,000 property owners who have not yet paid $1.8 million in 2009 county taxes, said office manager Laura Beers.
The letter stemmed from budget hearing discussions about the need to boost tax collection rates. Beers said more payments than usual have started trickling in.
Of the three cities, most of the unpaid bills are in Wilkes-Barre, where the owners of 2,728 properties owe $1.27 million in county taxes, Beers said.
The county imposes a 10 percent penalty after June 30 but has no other enforcement tools to get people to pay taxes the year they are due.
Taxes that are unpaid by Dec. 31 are forwarded to Tax Claim and subjected to additional penalties and costs. Properties are supposed to go to back-tax sale if taxes are unpaid for two years.
Some counties accept credit cards for property tax payments, an option being considered here, said county Commissioner Maryanne Petrilla.