Tax money coming to township
It appears that Buffalo Township won't need to take out a loan to cover delayed earned income tax payments.
The township is owed about $188,000 by H.A. Berkheimer.
Officials thought the township wouldn't receive that money by year's end and would have to take out a loan to pay off a $200,000 tax-anticipation loan.
“The Butler County Tax Committee looked into it and they promised us $100,000 before the end of the year, which will get us through,” said Supervisor John Haven. “There will still be a shortfall of $88,000, which they plan to make up in the first of the year.”
The township receives about $800,000 in wage taxes each year.
Bill Leonard, district manager for Berkheimer's northwest Pennsylvania clients, which includes Butler County, said there are two main reasons for the delay.
One is the transition to a new earned income tax collection system that requires employers to withhold the tax and reduced collection entities from 560 to 69 tax collection districts.
“With the transition for the employers and taxpayers and Berkheimer getting all this information together and getting into a rhythm with getting the money and getting it processed, the initial set up has taken a little bit longer because of the volume that we've had,” Leonard said.
Some of the delay can also be attributed to problems at former competitor Central Tax Bureau of Pennsylvania, he said.
In August, Berkheimer took over accounts from Centax, which shut down when a number of municipalities complained about long-overdue payments. Centax oversaw collection in 12 counties, including Armstrong.
The money collected was put into court-ordered receivership and was just recently released for disbursement to municipalities, Leonard said.
Haven said the township took out the tax-anticipation loan in case there were problems during the transition.
He said their caution paid off.
“We barely got anything clear up until May,” Haven said. “No matter what, we still have to run a township.”
Buffalo Township's secretary-treasurer, Janice Zubrin, has been working with Berkheimer to resolve the issue.
“I've had lengthy discussions with Berkheimer and they are doing everything they can to get us our money,” Zubrin said.
The delayed payments became an issue as township supervisors were developing a 2013 budget. Taking out a bank loan would add additional expense to an already tight budget.
Supervisors said they don't plan to raise taxes.
The $1.6 million 2013 spending plan is about $200,000 less than this year.
The township included the $59,000 it received from the state's Marcellus shale natural gas well drilling impact fee in the general fund. Other municipalities have created separate reserve accounts for the money.
Supervisors expect to approve the 2013 budget at their Jan. 1 reorganization meeting.
Jodi Weigand is a staff writer for Trib Total Media. She can be reached at 724-226-4702 or firstname.lastname@example.org.