A-K Valley schools owed $32M in back taxes
By Jodi Weigand
Published: Sunday, Nov. 24, 2013, 12:01 a.m.
Alle-Kiski Valley school districts are owed about $32 million in delinquent property taxes.
That's about the same amount that was owed five years ago when the Valley News Dispatch reviewed the figures for the 15 school districts that serve local communities.
With the exception of Highlands and Fox Chapel Area school districts — which experienced notable increases in delinquent taxes compared to 2008 — the amount of taxes owed decreased slightly in nine districts and increased slightly in four compared to five years ago.
This year's amount does not include Riverview School District because officials did not respond to multiple requests for information.
Delinquent taxes are a fact of life for school districts, business managers said.
Rarely do districts formulate the next year's budget and determine a needed tax increase based on 100 percent collection of real estate taxes. Districts typically budget for between 96 and 98 percent collection.
They include revenue from delinquent real estate tax collections, which is usually about a third to half of the total owed.
“What people don't realize is that some (properties) are in foreclosure; some are dilapidated buildings,” said Eugene Marraccini, Plum School District business manager.
The district's cumulative $5.2 million in delinquent real estate taxes goes back to 1927.
“Some of that is not collectable, especially going back to 1927,” Marraccini said. “What we don't want to do as school districts and business managers (is) repossess houses, because then you're in the real estate business.
“We try to work out payment plans. We want to keep people in their homes.”
‘On your own'
Highlands School District Business Manager Jon Rupert said one reason for higher delinquent taxes among Allegheny County school districts like his is that the county doesn't have a tax claim bureau. Armstrong, Butler and Westmoreland counties do.
The tax claim bureaus are responsible for collecting delinquent taxes turned over to them by the school district.
After two years of nonpayment, the property owner can enter into a payment plan with the bureau as long as they meet at least one of six criteria. Examples are being older than 65 and on a fixed income or unemployment that occurred during the time the taxes became delinquent.
If no payments are made, the properties enter a series of tax sales.
In Allegheny County, collection and sale proceedings are the responsibility of the district or municipality.
“In Allegheny County, you're on your own,” said Rupert, who serves as Highland's delinquent tax collector.
“A lot of the taxes go on delinquent for years and, by the time it's addressed, it's three times higher.
“We bill every month, we charge interest, we have payment plans and we have sheriff sales in some cases.”
The district recoups about $1 million in delinquent real estate taxes each year, he said.
Deer Lakes School District is the only Allegheny County district in which the amount of delinquent taxes declined compared to five years ago.
As of June, about $3.3 million was owed. In May 2008, delinquent taxes totaled $5.15 million.
Business Manager Dennis Thimons said the district's delinquent-tax collector, Keystone Collections, hired last October, is doing a good job recouping what's owed.
“Just seeing the checks come in, they recoup every month at a pretty good level,” he said.
An exact figure wasn't available. Keystone is expected to give the school board a detailed report at next month's board meeting.
Thimons noted that Keystone's strategy is to pursue delinquent real estate tax collections via a personal judgment in district court, rather than conduct a sheriff's sale.
A judgment is quicker to execute and hundreds of dollars less costly than a sheriff's sale.
It allows the taxing body to garnish wages or seize personal property such as vehicles, Keystone associate general counsel Jayson Lawson said in an emailed statement.
“That's a pretty serious thing,” said Thimons. “The threat of a judgment has moved a lot of people (to begin payments).”
Highlands is taking a new approach, as well, to recouping more delinquent taxes. The district plans to publish a list of real estate tax delinquents in the Valley News Dispatch in January.
The names of those who sign up on the district's payment plan would not be published, district officials said.
The publication is the result of residents pushing the board to publish the names of all tax delinquents in response to news reports about school board member Ron Lang owing the district more than $30,000 in taxes.
The last time Highland published a delinquents list, it included 500 properties, according to officials. As many as 30 people signed payment plans in the week after the announcement of the district's publication plans, Rupert said.
Armstrong School District in 2011 decided to sell its then-$5.5 million in delinquent taxes to Municipal Revenue Services. It is the only A-K Valley district to do so.
The firm provides Armstrong with each school year's delinquent taxes up front, minus a percentage fee.
Right now, the district's delinquent taxes stand at about $4.4 million, said Business Manager John Zenone.
County collection works
Westmoreland and Armstrong county school districts have high praise for their county tax claim bureaus.
“In my opinion, Westmoreland County has done a solid job,” Kiski Area School District Business Manager Peggy Gillespie said. “They provide us with a steady stream of revenue during the year.”
Franklin Regional school district's delinquent taxes, about $600,000, total about half of what they were five years ago.
And in the New Kensington-Arnold School District, the amount of delinquent taxes owed dropped by about $500,000 compared to 2008.
Leechburg Area School District, which is split between both counties, will ultimately have about $410,000 less in outstanding delinquent taxes compared to 2008. That accounts for 2013-14 delinquents that are added on Jan. 16.
“Armstrong and Westmoreland have a much better system of collecting delinquent taxes than do other counties,” Business Manager Mark Lukacs said.
The district has no delinquent taxes from before 2002, he said.
“They have a pretty good system that they move these properties through to recoup the tax and return the properties to the tax rolls,” Lukacs said.
Just less than $500,000 is owed to the district. That number likely will double when the current year's delinquent taxes are added, he said.
“It's a moving number, but we have seen some improvement over what it was before,” he said.
Jodi Weigand is a staff writer for Trib Total Media. She can be reached at 724-226-4702 or firstname.lastname@example.org.
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